What I find interesting about this anecdote is how 'uncensored' it is. This guy (I think?) actually worked with Marr. Marr has been generally diplomatic and circumspect over the years in regards to Morrissey, but I can imagine he's had discussions like this with the likes of Bernard Sumner and Neil Tennant. How does he feel, I wonder, about this guy coming out and relating what was presumably intended to be a private conversation?
It has the grain of truth - early Smiths records do seem to have more of an improvised, cluttered feel, but as has been pointed out above, there aren't many actual instrumental breaks even in later Smiths records, so I guess what we're mainly talking about is intros/outros.
I think the more fundamental truth it points to is a battle of wills between Morrissey and Marr for creative control of the final arrangements and essentially therefore, a battle for control of the band. Marr is always at pains to talk about The Smiths as 'his' band that he formed, and I think in the beginning that would have been the vibe, but by 1987 it must have been patently obvious to everyone (including him) that it was now Morrissey's band, and that Morrissey was the de facto leader. There's that anecdote about how during the studio sessions for 'Strangeways', a studio recording was sent over to Morrissey's room for his approval, and he rejected is, and when word came back to the studio, Marr hit the roof and said "well, get him to f***ing come up with something better then". I think it was Stephen Street that told that story. And the video shoot that Morrissey refused to turn up for, with Marr knocking on his door trying to get him to come out. And 'Work is a Four-Letter Word'.
All these things are symptomatic not just of the fact that they were no longer working in harmony, but of the fact that Morrissey was now decisively calling the shots (although in truth, I think he always had been, it was just that Marr was now beginning to chafe at the musical and aesthetic restrictions he felt Morrissey was imposing).