I have an elderly aunt who has always prided herself on speaking her mind, i.e. the truth - as she sees it. As a result, many of the family have as little to do with her as possible. She is much like an old woman at a bus stop in the 60s when I was maybe 18 and wearing a very short skirt.
'I think you look dreadful in that!' she said, with a sort of triumphant pride. 'I don't know you, but I always say what I think anyway, and I think you look awful!'
Depends entirely on the context, IMO. I would never tell anyone bluntly that a new hairstyle or dress didn't suit them - especially if I could see that they were pleased with it.
Personally I told masses of fibs to my mother when she had dementia. I became very inventive at them. There was no point in insisting on the truth when a) she was never going to accept it and would very likely be angry, and b) she was going to forget whatever I said so quickly anyway.