I honestly have a few issues with this statement.
First of all, it's kind of vague. Was he going to create a Jinton so large that it'd engulf and erase all of Turtle Island? We were never told that, exactly. Also the fact that his biggest ever on-screen Jinton against the 25 Susano'o (which was a very serious Jinton that exerted him quite a bit, and was aided by Tsunade) was not nearly as big as turtle island kinda puts that idea into question for me. He struggled to perform that Jinton, but would be able to casually destroy all of Turtle Island as collateral damage? I personally don't buy it tbh.
Secondly, even if we assume that he can perform Jintons that big, it's entirely possible that was simply a choice made in response to who his opponent was at the time. Deidara can fly and cover vast distances very quickly, so it makes sense why Onoki would want to pull out a large AOE Jinton against him right off the bat, if he can. Kabuto doesn't really fulfill that same requirement as he's mostly a grounded opponent. This would explain why Onoki doesn't really normally go for massive Jintons 99% of the time. It's simply not his in-character starting move.
Thirdly.......... uhhhhhhhhhhhhh, I forgot my 3rd point lmao.
Kabuto is aware of all of this, due to his knowledge of Muu's nearly identical power set. Onoki, on the other hand, knows next to nothing about Kabuto. Onoki usually gets within a few meters of his opponents before firing the cube or laser-like Jinton. He won't fly up a few kilometers away and try to snipe him, it's simply not in character. Plus, the starting distance is 15 meters anyway.
Kabuto will be able to outmaneuver Onoki long enough to use one of his genjutsu and end the fight. He can also summon huge snakes to distract Onoki and give himself openings.