This urban-myth came around at the dawn of internet chat-rooms (primarily) by 'Seagal-Haters' and has morphed (via chinese-whispers) as Seagal continued to piss more and more people off.
I know Seagal can be a jerk, but another of his traits (that even I as a fan, can admit) is that he rarely backs up what he says. I can't envision him putting himself in a (potentially dangerous or embarrassing) situation that has a fifty/fifty success rate. Therefore, I can fully believe he tried to 'sucker' LeBell (as other cast and crew have professed to this tactic) and Gene (as proficient a grappler as he is) wasn't haven't having any of it, and countered Seagal.
*THAT I CAN BELIEVE*
But no studio, producers, directors, investors, friends (and most importantly) paid bodyguards would have risked the safety of their star (if only out of pure financial reasons) which could have likely resulted in movies being cancelled, insurance recinded and huge lawsuits. So other than one strike (Seagal) and a takedown (LeBell) no 'choke-holds' or passing out (or defication) ever took place......as much as Seagal's detracters would have liked it to?
As for the person who spread the rumour, I'm almost certain it's LeBell. He's well-known for telling tall-tales, allbeit with a knowing-wink (if only to keep himself in the limelight) and it hasn't really done his career any harm, since. This is the same Gene LaBell that claimed to have choked out Bruce Lee also.
Bottom line is, both Seagal & LaBell are polar opposites.....Both tough guys, but Seagal takes himself a little too seriously (wheras LeBell doesn't) Perhaps if Seagal hadn just taken advice from LeBell and allow him to show the technique, both might have taken something from the experience.
However, this is Seagal (circa 1991) who likely thought himself unbeatable (and unteachable)