I'm curious who told you that because it's on par with many of the bits of advice the typical Barracks Lawyer will give ("if you're enlisted, you can mouth off to an NCO as long as they aren't in uniform", "regulations only apply when you're on duty", etc.)

Soldiers attending AIT for reclassification are not treated at IETs, but they still must meet all course requirements. I can't find a recent POI on the 35M course, but TRADOC requires the Soldier to pass an ACFT with at least 60 in each event in order to graduate from an AIT course (see TRADOC Regulation 350-6*).
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* TRADOC Regulation 350-6 - https://adminpubs.tradoc.army.mil/regulations/TR350-6.pdf

Considering I retired back in 2006, What does ACFT? I am only assuming it is a PT test. If that is the case, then your soldier is blowing smoke up your 5th point of contact. As a prior BNCOC (or whatever it is called now) instructor, all students are required to take and pass the PT test.

I cannot answer for the active duty army. I am a reservist who reclassed to the 35M MOS in 2010 at Camp Williams, UT (a national guard base). Reclass schools in the reserves are considered gentlemen's courses. I would imagine it would be the same on the active duty side. The student rank in my class ranged from E-4 to E-7. You won't be marching everywhere in formation nor will you be getting "smoked" for your boot accidentally being untied, etc. We were not required to take a PT test nor participate in organized PT. Our school was compressed into 10 weeks, whereas I believe the current 35M AIT is in the neighborhood of five months. My class had an approximate 40% attrition rate. I imagine that rate would be higher if the Soldiers attending this school were required to participate in organized PT/taking PT tests or even standard AWT. I understand the importance of PT and AWTs, as I do have a bit of an old school mindset (I was active duty from 1991 to 1996). However, when you are compressing a five month school into 10 weeks, setting PT tests to the side does makes sense.