This is not at all correct. The IP address of the hidden service is masked in exactly the same way that its clients' IP addresses are. That is, the client and service connect across the Tor network to an client-chosen onion router known as the 'rendezvous point', through which they set up a shared circuit.
See here for more detail: https://www.torproject.org/docs/hidden-services.html.en
Or here for the technical specification of the hidden service protocol: https://gitweb.torproject.org/torspec.git/blob/HEAD:/rend-sp...