If bad shit is unobserved and unpunished it has no cost and will be normalized faster.
Our problem right now is that people shake their fingers at Trump but he never actually pays any consequences - if bad actors are forced to pay for their damage we can discourage repeats from them and, if we publicize it, others.
Also, all but the dumbest marketers know that some news is directly damaging - it's just that some things you might think are damaging aren't. As an example, a wardrobe malfunction in the middle of a live commercial Ala Janet Jackson isn't going to cause brand damage because it's not actually a negative association...
Similarly, while Toyota needed to complain about the use of Hiluxes in the Chad-Libiyan border war because embracing it would implicate them in human rights abuses... The Great Toyota War was excellent PR for Toyota by both getting their name out there indirectly and by proving how fucking indestructible those fuckers are.
So I'd probably say that the premise of that statement is just false but is instead highlighting that a lot of things called "bad press" actually aren't.