That is 100% baloney. If the modem is on the supported list (and even if it is not) you will receive the same service as the person that shells out $4/month for a device lease. The $4 is not a warranty or service contract, and there is a BIG difference--its a device lease. That is what that extra $7 they are concocting is for.
All level 1 does anyways is minimal troubleshooting, so lets not stop the presses.
In the 10 years I had TWC I ALWAYS owned my cable modem (remember when they were free with signup guys -- REALLY
, and not once EVER did they not diagnose the issue. In fact the first thing they do is pull data from the CM. Every service call ended up being some hack contractor not running the cable from the tap properly and you know Buffalo winters kill anything with metal (thankfully I have fiber now).
Of course they reserve the right to charge $50 for a truck roll, and they find out your CM is the culprit, it doesn't mean they will. But the chances of that happening are SO slim. Most of the issues are signal and maybe device firmware, which if the CM is on the supported list, they can push from the comfort of their fingertip.
Now maybe your area is some commie CMA of TWC (through acquisition), but in WNY no such issues exist.
My point is buy the cable modem, save yourself from putting money under some executives bed, and sleep well at night. No boogeyman is coming.