Pokemon don't level up or gain experience when they're fainted, this can't ever happen.
He means if, say, a Squirtle got to Lv.16 from a Trainer's first Pokemon, but fainted on the same trainer's 2nd Pokemon and, after battle, evolved (it hit Lv.16), would it still count as "dead". I've never had this happen so I don't know. Personally, I'd say dead.
If life gives you lemons, sell 'em to Tom Nook. Black 2 FC: 0132-9980-0476 (Aki), 3DS FC: 5284-2520-2972
Since when? Not being hostile, I legitimately mean since when? I know for a fact that this wasn't the case at the very least in the first generation.
To be honest, I would like to know as well as I know it wasn't the case in Gen 4 and I'm sure it wasn't in Gen 5 as I have had instances where pokemon level to evolve, then faint, and don't evolve. If you revive them in the battle, then yes they will, but if you leave them fainted for the battle then they will not.