I have never heard this type of rubbish.
When the engine burns oil, the pickup is decreased. This is because oil is (and should be) much less combustible. [Otherwise go back to 9th chemistry and reread that smaller chain hydrocarbons have lower flash point and fire point than longer chain ones]. That is why when you race hard on an old engine, the engine 'misses' (plug fouling occurs and the spark plug becomes totally an insulator).
When engines are rebuilt, usually the bore increases. This means the displacement increases by as much as 10%. e.g. an 800cc engine would effectively go around 850 or 860cc. A 5700cc engine would increase as much as upto 6200cc (That is a whopping 500cc increase).
This is the reason rebuilt engines are MORE powerful (and more fuel consuming) than stock engines.
The power increase will happen if you use very good quality parts and the installation is very good (I mean from the factory everything is machine calibrated but in a rebuild, the mechanic can only use his judgement). Result: the more expert the mechanic, the better the response.
Due to the same inconsistencies, the engine doesn't come to full performance until after some 10,000km of use. Try it, although you will break-in the engine in around 1000km, the real power and added benefit of those extra 80-100cc will be noticeable after you've driven the engine around 10,000km.
Kabli engines are good, but only if going for conversion. Rebuilding your existing engine is better since you have ultimate control over the quality of parts you are installing.
One more thing: Whatever your mechanic tells you, your judgement is better than his. Most probably the mechanic has never seen school. The way you talk, we are getting the gist you also haven't passed your 9th chemistry.