You are right. It was also gas-operated as was that other great WWII infantry weapon the BAR.
My analysis: British civilians created this rumor and repeated it to themselves to explain all the deaths from the hushed-up E-Boat attack.
If dozens were "guilty" of killing scores of our own some vets would have talked by now.
The Browning .30 cals are recoil operated. They need one of these:
screwed onto the muzzle, as well as a cartridge stop installed in the feed mechanism.
It is highly improbable that a soldier trained enough to get and keep the weapon firing would not know he is firing live ammo.