yes, it is possible and my friend did it, he able to do the tethering without getting any sms charges,
However, his line was suspended today by Webe and the currentstanding of his bill is RM500++ 

People is smart, but telco is smarter

learnt from Maxis and Celcom for example, they did come out with unlimited call and sms plan, but
for those who misused it (sending thousand of spamming sms for example), the line are being suspended as well

Good luck to you if you want to try 

If this story is actually true, then they are charging him for what? For tethering? How can they charge you for tethering when you are not buying the tethering add-on?

If it is, then they should be transparent about their penalty.

Like on how they determine the rate for the penalty etc.