The problem is that cedar wood gives off fumes that are a natural pesticide. Maidens used to keep a cedar "hope chest" to store things they'd need when starting their own household after they got married, like linens. The cedar kept bugs away. There is a basis for that warning.
The hope chest worked because it was sealed. The reason cedar shavings are bad is that they have a lot of surface area to give off those fumes. Solid chunks of cedar wood do not have that much surface area.
As long as you have really good ventilation I'd be OK with cedar being the lumber that is touching the ground. Cedar is fairly rot resistant. I would not use cedar to build nests, those can be enclosed. I'd be reluctant to use much in the coop walls, roosts, or such but how risky that would be would depend on your ventilation.
Not a clear-cut answer, I know. It requires some judgment form you. For me it would depend on ventilation, winter and summer.
