This may or may not be true in practice, but I've got a problem with it from a theoretical point of view. I think distortion compounds itself. The statement that "the distortion introduced by the tracking error...should be below audibility and way below the other distortions introduced by the pickup/stylus/cantilever, not to mention the distortions introduced by the speakers..." implies that only the worst distortion offender in the chain is significant, and lesser contributors don't matter. Taken to an extreme, let's say the speakers have 2% THD. Then it supposedly wouldn't matter if the amplifier had 1.9% THD, the preamp another 1.9%, the turntable yet another 1.9%... get my point? I think that not only do the distortion components add, anything distorted early in the chain gets distorted yet again by every signal processing stage that follows. From that point of view it makes sense to try to absolutely minimize the distortion at the source first, with every succeeding stage being of *slightly* lesser importance.
All that said, I have both linear and pivoting tonearms in my system. I prefer the linear tracker for a number of reasons, but I don't detect any difference in distortion between the two. My system is decent, but there are certainly far more resolving systems that might make differences more audible.