Yes, I believe that is correct. When your town has reached maximum capacity, the game treats it the same way as if you had 9 villagers in that you are in "exit mode" (a villager must leave).
From how I've cycled.. whenever I have 10, 2 leave before another even moves in. I've never seen where it'd drop to 9 and someone would move in, unless I recruited from the campsite/etc.