Glen is correct the regs are clear, you can fish musky with a conservation license.
The biggest problem with this urban myth is the people that should know the law don`t, instead they convey their own opinions instead of sticking to the law.
The biggest offenders are the police, last year on Scugog I was approached for a spot check and after my boat passed the check he inquired if we had caught anything and I mentioned my son had caught a musky and thats when the officer informed me that it was illegal to fish for musky with a conservation license and thats when I politely informed him that is perfectly legal to fish for musky with said license and it clearly states that in the regulations and I had a copy on board if he would like to check he declined.