I don't know, John - I heard the same tales.
Seems to me, it wasn't noses X's, but noses cut off or filed off, became "Dum Dums".
I've read, likely back in the 60's in Guns and Ammo (I had a subscription for many years while I was in high school and beyond), that the terminology of using Dum Dum virtually universally for ANY soft point ammo was due to the Dum Dum factory putting out soft point (HP) ammo & people thus named soft-pointed(altered) military ammo just that.
Too, the British ammo with the 173gr.,(I think) FMJ had compressed paper in the nose, which oft times resulted keyholing (from the paper or not didn't matter) and this supposedly made them be called Dum Dums as well.