This is probably true, but hard to quantify since most manufacturers don’t publish information about the lowest modulation.
Based on my monitoring I can see that my 5kW Samsung Gen6 will modulate down to about 3kW, in the summer the lowest modulation will be higher than in the winter. However, cycling does not seem to reduce efficiency that much, I actually found that running my heatpump at a slightly higher flow temperature 35C instead of 30C resulted in a slightly higher overall COP, this resulted in more cycling but a higher Carnot efficiency.
e.g here’s a typical day in the shoulder heating month of April. The default room temperature control on my Samsung is quite loose i.e it will allow + or - by 1C above and below the set point, a tighter temperature control would result in more cycles of shorter duration.
Zooming in on one of the cycles, very little energy is wasted at startup since the HP starts producing heat output almost immediately after startup.
If you don’t have backup heating source e.g wood stove, a modest oversizing e.g 20-30% is probably a good thing to ensure you can meet full demand including DHW in winter.