It is very common that the professional caregivers would lie to the client or patient. One reason is that the patient does not admit that he/she has dementia of any type. Even if he/she knew when it is early Alzheimer's, the patient would not know it anymore later on as it gest worse.
My father-in-law has moderate AD. He has never admitted it. As an MD PhD, he studied the brain without seeing the patients in the clinic (he cannot practice in the US; he used to in Poland 45 years ago,) so he never even agreed to the doctor's test on his cognition level. He said in Nov 2006 that the doctor was wrong and that he would know! The thing is dementia patient is trapped in it that he would not know ever. He is 88.
He knows something is wrong with his brain and we have to tell him he is losing memory.
I can understand your concern that too much lying seems to be too much. Sometimes we also lie to my FIL who lives at home alone and has 24 hours caregivers.
Especially the home care nurse who is the home care boss also, she lies tremendously to him. She begins with talking to him the way he wants to talk about. In 2007 he was still kind of real, ever since 2008 and esp. this year, he no longer knows or remembers his career as emeritus professor and he forgot how to write and read. (He can sign and he understands words without abstract thinking.)
At times we would pretend he has a TA who is the night caregiver, and that the home care nurse is the lab manager...
To be honest, I was fed up with her lies so at times I told him the truth. But next day he would forget about it. This year he is agitated and if things don't go his way, he gets mad and fuzzy. One time I had to lie to him and say yes he is going to teach tomorrow (but not now late at night) and that I would buy the material to teach! Sometimes we have to lie to him to calm him down. None of us is trying to lie or be dishonest to him, but his mental state cannot bear the truth in reality, in which he has lost all the capabilities to live normally and he can no longer jog or drive and etc. The home care nurse lies to him saying she does not have dirver's license either to soothe him.
I myself don't like to lie too much so at times I try to tell him the truth or half truth. e.g., he does not notice he is living in his own house, so we tell him it is his house. In the future, we may not be able to do that because he get excited and upset when he is told it is his house. You see, since he does not notice it is his house, it takes a lot of questions and effort for him to realize it is his house and since it is his house, he is anxious to know what happens to the house... (He thought he sold the house) and he would want to sell the house without any proper repairs!! (It is a very old house without proper remodeling.) So what do we do? Just let him think it is not his house unless he asks about it.
I can imagine in the memory care unit or nursing home, the professionals would lie to him to calm him down. I think the family, however, has the right to observe to tell the truth when it fits. It is up to the family to decide if you want to spend time explaining the whoe truth over and over again every so often. If you feel he should know certain truth without getting him too upset, I think you should be able to tell the truth. The professionals lie to the patient because they don't have time and they have the responsibility to keep the patient calm. The family is different and may be able to tell the truth sometimes. To be honest, in the end, my FIL lost so much memory that the truths don't work anymore. Sometimes we repeated so much that we gave up and stopped telling him the truth.
Sometimes my FIL had to pretend his house is his lab (he used to do research) and that all the caregivers are his lab workers in 2008. At the beginning I tried to correct this fact. It still works now if we tell him he is retired and etc. He is losing the ability to imagine the fake lab this year. Overall, some white lies are ok.
However there is line here that you don't the professionals to cross though.
For example, my FIL was lied to by the home care nurse so much that he once thought she was more important than my husband. My FIL actually wants her to be his girlfriend all the time although she is married. So we had to correct him and tell him we hired the home care nurse and he was able to recognize it. I told hm again and again that she is married. But once he thinks she is hired, he demanded her even more. My FIL just cannot live in a real world. It is either his brain or his mentality that he cannot accept he has Alzheimer's.
Hope this helps,