I think it depends on how you define this saying. For example, in software development, you have multi stages of building a product with the final stage being able to automate everything without any manual labor involved.
However, it's very costly in term of both time and money, and thus very risky, to try to reach this final stage at the beginning. So what you can do is you "fake" the automation stuffs. Lets use a naive example: on your agreement, you say you will backup the system for the customer every 24h. Ideally, you would do that automatically. However, building such a backup system can be costly for you at first and if you have no customer it will be a huge waste. So in the first months, you can have someone who actually perform the backup manually every 24h for you. Once you justify the benefits then you can actually go ahead with building the automation system.
In this way, you are not deceiving any one, you still deliver the exact service you promise promptly. I think Fake in till you make it work well in these situations?
For short term it might appears appealing, but if you want your venture stand in market for long life avoid it as much as you can.
In my opinion, the reason honesty is the best policy is because it builds trust and allows your peers/clients to leverage your or your products strengths and also help improve areas of opportunity. That urge to over-pitch usually stems from a feeling of insecurity which usually sounds like "I'm not good enough" coming from that little voice in our heads. This pushes us to seek for approval/acceptance (security) so we over-exaggerate about a feature/application during a sales presentation OR (my personal favorite) put things like "Proficient in Microsoft Excel" on our resume's when we only know the SUM() function.
Then, when you achieve your goal (like getting the job/sale) despite lying, you are conditioning yourself to lie to get things that you want and are usually less motivated to fill those "gaps" because you have already reaped the reward. This can be an ugly path!
On the flip side, when you are authentic (and all great leaders have a great sense of authenticity), you are actually making the people around you feel more secure. There seems to be less "unknowns". The "gaps" in your resume or products/services are now areas of opportunity or a road map for how your peers or clients will work best with you/your product/service.
One of the ways that I have learned to deal with those insecurities is to just let go of all expectations. Having expectations can urge you to push your agenda onto others, which can create insecure feelings within your audience. If you expect a yes, and get a no, it doesn't feel good and, depending on the circumstances, can potentially create a very negative situation for yourself.
Hyper self-awareness is also helpful!
My two cents!