No. My wife does not have a GC. My friend called me before i even start CBRA process and he told me at his oath ceremony the IO said everybody has a child 10 years or younger is atumatilly a USC even if he lives in overseas and this is what encourges me to go to the embassy. I remebered when i called the state department the rep told certain cercumstances applies. Tomorrow i will know from the consular section
Either your friend misinterpreted what the IO said or the IO had been smoking some crack in the morning There is (to my knowledge) no law that applies to children under 10 to grant them automatic derivative citizenship. In general there is no law that applies to 10 year old and younger. The child citizenship act cutoff age is 18.
Here are some other charts on children born abroad:
http://www.uscis.gov/propub/ProPubVAP.jsp?dockey=724ce55f1a60168e48ce159d286150e2
http://www.uscis.gov/propub/ProPubVAP.jsp?dockey=724ce55f1a60168e48ce159d286150e2
http://www.uscis.gov/propub/ProPubVAP.jsp?dockey=724ce55f1a60168e48ce159d286150e2