This is a common rumor but appears not be be based in reality. Lots of hobby rockets have guidance now. It's fairly common to have enough guidance that the thing will go straight up.
Well reading the ITAR guidelines it is clearly covered under Category IV (Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines).
Specifically:
(1) Flight control and guidance systems (including guidance sets) specially designed for articles enumerated in paragraph
(a) of this category (MT for those articles enumerated in paragraphs (a)(1) and (a)(2) of this category);
Note to paragraph (h)(1): A guidance set integrates the process of measuring and computing a vehicle's position and
velocity (i.e., navigation) with that of computing and sending commands to the vehicle's flight control systems
to correct the trajectory.
