I don’t think this is true. With any lens, if you focus it to “infinity” so that incoming parallel rays are focused to the same point, there is a distance that will be far enough so that for all practical purposes, it can be considered infinity.
If the Hubble’s lens is about one meter across, and it’s orbit around 300 km above the surface, then the blur due to being out-of-focus would correspond to a resolving power of around 0.7 arc-seconds. The Hubble can do 0.1 arc-seconds, so it wouldn’t be as clear as the Hubble could do, but the best Earth-based telescopes resolve about 1.0 arc-seconds, so it would be clearer than that.
According to my bar-napkin calculations, anything greater than about 2000 km from the Hubble would be practically infinity.