I think the implication was that making the team feel good shouldn't come at the expense of communicating the truth.
This is a real problem I've had with some managers in the past: They try so hard to keep everyone happy that they're afraid to have difficult conversations. They soften negative feedback so much that the point is lost. They might even open themselves up to being manipulated by employees who learn how to leverage their desire to keep the team happy and use it against them.
Obviously it's not supposed to be like that, but it's a common pitfall for first-time managers especially.