I didn't ever hear anything about that.
I always loved The Band. But I mostly appreciated them as songwriters. I never could hear what Rick was playing on bass. If you listen on the radio, songs like The Weight, Cripple Creek, or The Night They Drove Old Dixie Down* still get played, but the bass is just sort of a barely perceivable mush underneath everyone else. I always assume he was an extremely minimalist player until I watched the DVD where The Band, the Grateful Dead, Janis Joplin and some others did a train borne tour across Canada. I watched Rick playing while he sang The Weight and was seriously surprised at how much his hands were moving. I thought "Man. I wish I could hear what he's doing."
That was a sadly typical isse with a LOT of music recorded back then. The only thing I like better about 'modern' songs is that you can at least make out the bass part.
*I can hear the bass line in 'Dixie Down', but only the part done on tuba. Apparently producers just hated bass
guitars back then.