It's nonsense.
You could twist the whole "fear of rejection" thing round to why Spencer and Kate never got closer than they did. Spencer was very guarded, but he dropped that guard one night (after a few drinks) and the way he looked at Kate you could see he fancied her (the night sandy announced he was leaving). He's admitted he did in magazine interviews, and has said he wouldn't rule out a relationship. Again, I still find it interesting that this night was never shown - they snogged for petes sake!
I believe Kate when she says she could never fancy someone like Alex, even though she thinks he's good looking. Flirt with each other a bit - maybe, but for Kate there were far stronger feelings towards Spencer. Perhaps not at first, but by the end you could see that. The night Spencer got evicted Kate also let her guard down when asked about a relationship with him... Rather than her usual answer of "I've just broken up with a boyfriend and I'm not sure I want another right now" it was "I don't think he fancied me, but we'll see each other again, and if it's as something more than friends then... Oh I don't like talking about it with the cameras"
Plus, she laughed every time Spencer burped and farted in her face towards the end - if that ain't a girl with a bad case of it, I don't know what is.
If I remember correctly, when Kate said if she could get naked with one guy in there, it would be Alex, Spencer was still very very quiet and had barely said a word to anyone. As soon as he came out of his shell, she had more time for him, and that was that.
I think it's just channel 4 trying to create something interesting for the last two weeks. When Kate does come out and Davina asks her "Alex or Spencer" - she'll probably laugh. We'll see though - maybe they're right.