Nolvadex is used as a mid level estrogen product. It isnt that this steroid reduces levels of estrogen but instead blocks estrogen from the estrogen receptors.
This steroid reduces gains should not be taken too seriously. The fact is that any number of bodybuilders have made excellent gains while using this steroid. However, if this effect exists at all, it must be very minor, due to the excellent gains that many have made, and from the fact that no one has noticed any such thing from clomid which has the same activity profile.
The fact it will reduce water retention may result in the user agreeing that gains are less, since weight gain is less, thus reinforcing the bias.