No that's not correct sorry: the FS engine can deal with holes and intersecting polys just fine.
In fact if you have sharp edges displayed in-game on a supposedly closed-mesh model, you're actually looking at holes along those sharp edges. I have not seen exactly what the intolerance to holes looks like in wings, but I do know it's actually quite annoying for me when dealing with models that have come from or are destined for wings.
The basic rule is to keep your geometry clean, and keep intersections relatively shallow (mostly due to wasted texture space). I posted the relatively common geometric errors that can sometimes, (and I must emphasize
sometimes) produce faults in-game in the blender to pof page in my sig. For people new to modelling yeah it might be best to avoid holes, but once you know what you're doing and how face and vertex normals relate to the end result, you can do anything your program will let you.
