Read the whole thread and that looks like a classic false positive to me. The premature "worst case" diagnosis makes the shop look pretty sketchy too. Interference is having the timing belt break cause the pistons to hit the valves. Timing belt break in conjunction with some other engine problem is something else. It's likely that Toyota once proclaiming this to be an interference engine has contributed to false positives over the years, perhaps some in good faith. But people on this forum have turned this engine every which way and not been able to get the pistons to touch the valves. I'm still looking for a credible case.
The initial shop didn't do the final assessment. That was done by a cruiser specific technician here in CO recommended by mud members. Your call on what you believe and how you service your vehicle.