Yes that is true....but a lot of LS engines are converted for aviation too.
Define "a lot".
Porshe tried to break into the aircraft engine market twice. Once in the 50s with their flat 4 and then in 1960s with their flat 6 911 engine. Engines were substantially down rated.
Corvair engines used to fairly popular with homebuilders but good converter shops generally held the power down to about 80ph for reliabilty.
This engine seems like a real boutique engine. Special purpose (fits in scaled down Mustang or Spitfire cowl) with few or no bulges or bumps and offers much more power than any "certified" engine using a bunch of higher quality parts than the stock engine and at the cost of factory BMW parts that is going some.
Number of hours flown per year is what?
Cost of overhaul is what?
At the end of the 1950s/beginning of 1960s both Lycoming and Continental were offering some "advanced" flat 6 air cooled engines. Lycoming was offering a fuel injected, supercharged, geared 340hp 7.3 liter engine. That 340hp was good for 11,000ft courtesy of the supercharger. They also used a reduction gear to allow for 3400rpm for the engine.
By the early 60s Lycoming was changing over to an 8.9 liter engine that could do away with the supercharger (unless in the mountains) of 350hp.
At lower power levels the larger engine could also do away with the reduction gear and run at lower RPM. Overhauling the supercharger and reduction gear cost almost as overhauling the basic engine itself.
Race engines are all about high power and overhaul life is very far down the list. For an air force they need to find a sweet spot, lots of power but they can't be changing the engines every 20-30 hours.