This may be true of some, though the old GM vehicles, for example, were usually set to run the AC drying unit when in defrost mode.
Yes, the AC will clear INSIDE condensation quickly regardless of whether in recirculate or high heat, because yes, it does dry the air. However, left on for any length of time, AC air that is colder than the outside air (ie. when the temp control is set to NOT heat it), will build up condensation on the OUTSIDE of your windshield, which at first _appears_ to be mist on the inside but is not. This will continue until you either stop cooling the air by running AC, _OR_ you add heat to the situation by adjusting the temp control hotter. This is an unavoidable consequence of maintaining a temperature difference between the inside and outside glass surfaces, where the outside surface air has moisture available to be condensed.