Maybe they all live in a house with a granny annexe? Or maybe this is a wind-up - who knows?
Taking things at face value, and assuming that there are no relevant lockdown issues, I think that it seems harsh to punish a young child in this way, and as has been said, it will only encourage him to lie more. Having said that, I also agree with whoever it was that it is not a matter for the grandparents to decide.
Your role is to support the parents, not to undermine them or criticise their child-rearing, outside of very obvious boundaries (eg if they physically punish the boy).
Interfering will only make things more difficult all round, and potentially reduce your contact with your grandson even more. If you are not interfering, but just sounding off on here, then yes, it is a shame that this has happened, but presumably it won't be ;one until you see him again, and you can have a lovely time then.