Disclaimer: This assumes any of the above rumor is true...
As I heard it, they over-accessed the Jet pipeline and rather than just boot the 'excess' out (as happened during the '90's RIFs) CNATRA sent them direct to the VRs as FTS - mostly C-40s but a few to the Herk squadrons and I heard at least one went to VR-1.
It wasn't just jet guys, it was flight-school wide. Helo guys went to HCS and HSL, as well. Not sure if any went to HM.
It was certainly a good deal for those dudes.
Like always, it depends. On the helo side, they served their commitment out for one tour as FTS and then had the option to stay or go SELRES. But what does a mid-grade FTS LT look like on paper compared to their other FTS counterparts? Not good. By the time they're up for O4, as FTS, they haven't had the FTS check in the boxes that other community LTs may have had (SWO, HR, etc). They would have looked like fleet LTs, but FTS isn't really used to seeing that, so it could have been a gamble.
Experience was also a balancing act. For HSL, it wasn't as big a deal, but I ran into a HCS crew broken down in Abilene at one point and one of the pilots was a JG. I asked the HAC how that was working out and he said there were definitely teething problems, not because the JG(s) were bad pilots or bad people, they just hadn't had the experience that a normal pilot would have had by the time they came to a HCS squadron, given their mission set. Could they be trained? Absolutely, and HSC attempts to do this, but HSC isn't flying through downtown Iraq at night as a division with TF birds, either, so it isn't exactly an apples to apples comparison.
All of the HSL guys ended up getting out and staying SELRES for a while. But even after making O4, I think one may have actually stayed beyond that (and he may have left, as well...I lost track). The other part of the problem was the amount of effort needed to continue to participate wasn't going to match the lack of retirement points and lack of eventual retirement benefit, so IRR was a better option. It's one thing to start as a SELRES with 3650 points, it's another to start with half that.
If you just want to play USMC for a tour and then plan that you'll be asked to leave, then it may be a great deal, and maybe you'll get to stick around, but go in eyes open.
All that said, I have a feeling the reality of this rumor is similar to what the Navy used to do, where they'd commission ROTC guys, then send them to IRR for 6-12 months while flight school was backed up, then reactivate them when it was time to report to NPA. In reality it had nothing to do with the "real" Reserves.