That'd be my reading of it, yeah. "I see, sounds good (that you're moving on)" or something along these lines.
I think having a route that depends on Ian going all NOPE, FORGET IT, DO NOT WANT at the beginning of the game (that dialogue option requires burning Gillian's pictures and willpoint) as opposed to explicitly selecting "i still want that" would be extremely counter-intuitive on the player, since it'd be like the literal opposite of how every other route works in the game.
As far as i can tell, the game plays this choice straight, i.e. Ian who burnt the pics and selected option he's moved on acts genuinely as if he's moved on, with zero intention of actually having anything to do with Gillian anymore. As opposed to Ian who selects the heart option.