Yes it’s true, a version was being worked on by Bungie for Space Ship combat. Which is why they prototyped an entire multiplayer mode based on that one spaceship level from Reach. Marcus Lehto the Halo Reach creative director said:
“We joked about it from time to time and even had a rough version of it working very early on in development. But the mechanics of it were pretty silly and we very quickly realised that the resulting gameplay experience wouldn’t hit the bar we were aiming for, nor justify the amount of work required.”
I’m wondering as to how they thought it would be silly. The AC-130 and the spy drones missions in all of the recent Call of Duty titles were an instant hit with the players.
“With so many features and so much content already committed, Reach was an incredibly ambitious project on an already aggressive schedule”.