The answer is BS.
First of all,most of the Phoenix Project people were US Army Special Forces. The SEALS only operated around shorelines,and rarely stayed out longer than overnight.
Secondly,even though the regular army didn't get the "rip-stop jungle fatigues" until sometime in 68,SF had them as issue items when I got to Ft Bragg in 1964. They were in the US Military supply chain as an official item with a government stock number,so the SEALS could have ordered them.
The standard issue fatigues given to the US Army at the time were made from cotton,just like blue jeans. I am almost certain the same can be said about the standard issue "utilitIes" given to the USMC and the SEALS.
Finally,blue jeans were thicker than jungle fatigues,and would stay wet MUCH longer than the issue jungle fatigues when were much thinner. This is important because the blue jeans would cause crotch rot and chaffing.
BTW,the "tiger stripe" thin jungle fatigue shirts mentioned did make sense because unlike something blue,they did blend in,and they would dry much quicker.