Yeah, Retro originally envisioned the game as a TPS. Then Nintendo came in and said "make it an FPS". I believe it was Miyamoto specifically who said that. He has a fascination with games in first person perspective (he's expressed multiple times he has wanted to have a Zelda game in first person, but he doesn't direct that series), so it wasn't too surprising.
Some of Miyamoto's FP Zelda ideas were pretty wild. At one point, he suggested "Zelda 64" should have been a Terminator-style time travel story as an excuse to give Link a gun.