At this point you are thinking, "Well, of course this one is fake! A game causing people to commit suicide is a horror movie plot and would be an insurmountable public relations disaster for the developers and publisher in the real world!" And you would be right. But there's some interesting aspects to this town, and it's music, in the greater context of the game that could be the reason this particular rumor sticks around so adamantly.
For starters, let's consider the music. It's stark, deliberately atonal and reminiscent of early horror music soundtracks. It's been suspected that the tones are spaced out in a certain way as an experiment in binaural beats, which are a particularly creepy sort of music that seems to literally vibrate your brain. We know, right? Regardless of whether or not your brain is dancing along, the music sets a pervading tone of dread.
The town itself represents a drastic shift away from the tone of the rest of the game. At this point in an otherwise cutesy and playful game, it is revealed that Pokemon are actually capable of dying. Your Pokemon. That you've loved and raised and waited up for at night when they've gone off on their first date… you love them. (We're not here to judge.) That initial shock of that revelation could be why so much fixation is placed on the town. It's not the sort of place you'll forget any time soon, especially when it's scarred your impressionable young mind.