4/3 has no focal length advantage-correct him if he is wrong

A friend using Nikon FF told me recently that the E520 system I am using has no focal length advantage when he saw me happily snapping away with my 50-200swd toy.

According to him, when I say my 50-200 is equivalent to 100-400, it only means the field of view is equivalent to his FF 100-400 but the focal length is still 50-200mm, therefore, all the rhetoric about 4/3 size advantage is bs.

As I am new to photography, and too embarrass to attempt to reply to his remark, could someone here explain to me in more details what he meant and whether he is right?

Regards

Cleve