My confusion resided here:
I thought he was saying don't shard items because it would potentially lower your experience level say from 34 to 33. I had no clue that it ever meant I had to hang onto all of my exotics to get them back. I'm on here all the time and that was never communicated in any form or fashion that I can remember.
I didn't buy Obsidian Mind from Xur because I thought a few days later I'd be able to buy it back. Nope.
That is just one example.
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Exactly, I thought the don't shard gear was referencing infusion.