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I haven’t seen the sources for those claims, but it seems to me to be half truths. Technically an issuing government can forbid the holder from doing anything with the passport, including send it away for immigration purposes, but it would be unusual.
In theory, since national passports are the property of their sovereign issuer, foreign governments can’t impound or retain them either. However, it is understood that foreign governments can require the document to be sent to them for visa and other purposes.
In practice, retention happens a lot, like in US court cases where there’s a flight risk and the judge doesn’t care about breaking international treaties, or when hotels keep travellers documents to guarantee payment for a room. Is it legal? Very likely not, but it’s normal.
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Eseman
skinny
IIRC your passport issuing authority may forbid you from sending your passport to the HO, and the HO’s legal right to demand that you do so is also questionable. This from reading threads on Twitter about the subject from a while ago, so may of course be total bollocks.