I don't seem to recall an invisible time limit in any stage except the Finalhazard (and even here, I've never seen it; just going by word-of-mouth). A time of 35:00:00 could be covering for a typo, or just be stupidity. That said, it's last place, and hurts absolutely nobody: all it does is add one point to everybody who has not submitted for City Escape 1 (which is almost nobody). It also makes Sonic Adventure 2 on the whole count for a bit more Sitewide, so everybody went up a infinitesimally small bit of a sitewide point. :P
...that said, it is obviously false, but not the kind of false that merits calling somebody out.