No, the use of D1 was not "false PR on Paramount's part." As it says in the official ST:TNG magazine piece, the whole reason they moved their post-production to that digital bay at The Post Group was so they could work entirely
in D1 and abandon the analog 1" tape. Note that the article also says, "...some of the equipment in the bay is still considered R & D (Research and Development) and came with no manuals."
Given the option between D1 and D2, D1 is obviously what they would use given the heavy amount of live-action bluescreen photography shot on the Paramount stages and the front light/back light ultraviolet matting they were doing on the motion control stages at Image "G".
As I said, D2 might have been used further down the chain when titles were put on the episodes. That would explain everything you're pointing out without contradicting the existing sources of information we have.