It definitely wasn't a lie. The folks at Research put a lot of effort into machine learning and programming the rules and being strategies of Jeopardy into it. As someone who played the Watson machine many times before it was introduced to the world, I can tell you that they really started slowly. It was amazing how much better the system has gotten around showtime. It's a lot like how much better Google has gotten, for the same reason.

That said, Watson was definitely a very vertical solution when it was built and like many Research projects, a lot need changing and a lot of services needed to be invented to get it into product form. There was a lot of custom code needed to make it work for other use cases. IBM makes its money on business to business, there's little point or profit on continuing to pursue the Jeopardy angle. So they first went after medical, which makes a lot of sense given the huge compendium of public sources available.

Watson now is a brand that encompasses pretty much anything that has even a modicum of machine learning code in it. So while the roots are the Watson that played Jeopardy, the are a lot more things named Watson now that had nothing to do with Jeopardy.

To;Dr it's not a lie, but it is more of a brand now than what it started as.