Oh good times. I heard similar things growing up, but my absolute favorite child traumatizing rumor was told to me by my dear sweet aunt. After several long bouts of SNES at my cousin's house and refusing to do anything else, my aunt told me that too much videogaming can cause cancer.
Being around the age of 10, I just knew that cancer generally equals death and I'm pretty sure I cried and cowered in fear at the sight of that tantalizing grey console for a while.
I now love giving my aunt shit about that at family gatherings as she turns red and shakes her head at one of her not so proudest parenting moments. Of course I don't hold any resentment, I just find it hilarious and enjoy embarrassing her with this and and other fond childhood moments.
On a random note, maybe the bladder bursting was specifically a Sega Genesis side effect due to all that "blast processing".