Eh, it's a bunch of BS.
Lynch was more involved with the first part of the second season than he was with Season 1. If any period was effected by Lynch being distracted by Wild at Heart it would have been the first season.
With the second season, he personally directed 4 of the first 8 hours of the second season and had a major acting role in another episode. All of that was happening during the direct lead up and release of Wild at Heart. And a lot of the season's worst subplots were being seeded in those early episodes when he was still actively involved.
I think he just got frustrated with the network demands during the first start of Season 2 and stepped away as soon as he could. Reading interviews with the cast from the time it seems many of them, including MacLachlan, felt betrayed that he left them high and dry. I've been reading the Essential Wrapped in Plastic and much of the cast is incredibly frank about how awful the material they had was and how frustrated they were that Frost/Lynch were no where to be found. I think he has been packaging this Wild at Heart excuse over the years as a way to avoid taking personal responsibility.
Personally, I think Mark Frost's absence was the bigger issue. He was the guy who was actually experienced at running a TV show day to day and he was off making a movie during most of Season 2 and arguably had less involvement than Lynch. Peyton and Engels seemed to become the default showrunners and neither seemed experienced enough to handle it.
What I found truly bizarre is that evidently Lynch was a part of the interview process for casting Ted Raimi in the throwaway role as one of
victims. Lynch has time for that tiny bit of casting but he can't be a bit more involved in providing better oversight when the season was spiraling down the gutter?