It could be a 'teething rash', DD gets a bit splotchy and what not when she's teething... mainly nappy rash but I've found it also spreads up her torso and sometimes down her legs, I've never seen it on her face but yeah she does sometimes get a rash on other parts of her body when she's teething...
Could also be from playing in grass, DD never got much chance to run around outside until we moved into this house and the grass was really long at one stage (there's also a lot of plants in the garden beds that she plays and hides in too) and she was covered in various rashes for a few weeks until her skin adjusted to the new irritants (now she can play outside all day and only risk a sunburn, unless she plays in the bamboo, that seems to set her off but the grass is fine).

If you're concerned just try and get her in to see your GP, but if Jazz is otherwise okay (ie no symptoms other than teething ones) I wouldn't worry too much. I was so paranoid with Emily for a while because when she started walking she started with all these rashes on her belly/chest, I was constantly at the doctor's asking whether it was allergic reactions to the cats/the grass/the laundry powder/something she'd eaten/etc etc but the doctor always just said 'looks like heat rash' and once gave me a script for a children's antihistamine (which I used once and it didn't do much so I figured it wasn't an allergic reaction).

But as to the question of whether it's an old wives tale or not, I personally would be inclined to say yes, purely through personal experience. I never read anything or heard anything about rashes other than nappy rash during teething, but seeing DD break out in splotches/hives when she's teething has convinced me it's true
Just give her the old cool wash cloth, lots of teething gel if you use it, and if you can let her get around with as few clothes as possible to let her skin air out a bit, I find that usually helps

Good luck with the teething!! I always feel sooo guilty when DD teeths because she's cranky and irritable for a couple of days before I realise, and in that time I get frustrated and probably treat her a bit meaner than I should - then I'm like, 'Oh, I get it now, you're in PAIN rather than just being a pain in my a$$!' and she gets spoiled until she's over it to make up for my being a cow lol