I don't think this is true. The game seems to still have LVL3s alongside Stones, the damage output in this game is going to be too hefty for that system.You know, I was looking at the gameplay screens that have the hud on them and noticed/thought of a couple things.
Level 4 is the max level of the hyper meter now.
Characters can get locked out from tagging it seems.
And looking at the health bars...what if one of the things Ryce is talking about is them going the tekken tag/sfxt route of once one bar is gone, you lose?
If it is true then SFxT2 here we come!