Can new employer file for H1B after current employer H1B Transfer Denial ?


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ABC employer is my previous employer with whom I have valid I-94 valid till May 2021 and also my previous employer did not revoke my H1B.
 
I joined XYZ employer on transfer receipt and it got rejected on June 25, 2020. Now my XYZ employer is refilling the case in consular processing while I am still in US (I guess so as he told me that I will have to leave the country post approval and re-enter).
 
I have a new employer who is filing a new petition and he told me that I can start working on the receipt and don't need to leave US and re-enter since I have valid I-94.
 
The new employer tells me that he has done similar cases at least 30-40 and said I would get I-797A which will have updated I-94  on it and not I-797B. May I know if this is correct.

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