hllywd,
no urban legend.. Do a google search for Palytoxin.. Then you will see. It is one of the most potent toxins that occurs naturally. Where does this toxin come from? Palthoa, Protopalythoa, and occassionally Zoanthids..
Most peoples contact will not kill them.. If you get "tagged" most likely you will feel numbness in the affected arm, tase copper in your mouth and feel short of breath.. The effects should wear off. However, if you ATE a toxic polyp, well, I wouldn't want to be you..
The caution is more for reefers with pets and children that don't know any better. And god forbid you have an allergic reaction. People HAVE been killed by bee stings, this is no different..