I believe in being honest, but I also believe in being careful and intentional in how I express that honesty – and that applies to ALL my interactions, not just (or even primarily) my religious/church ones. I believe in creative honesty – and I don’t think that’s a paradox in any way. (I also believe in being flat-out, unambiguously, blatantly dishonest in some rare instances, like protection cases. If I was hiding a Jew and a Nazi asked me if I knew where any Jews were hiding - or if I was being asked by a criminal where my wife and/or children were, I have no problem whatsoever lying to protect someone else in that type of situation.)
Here's a common example of what I mean by creative honesty:
If my wife asks if a dress makes her look fat, and if the dress does, in fact, make her look fat, I’ll answer her honestly and say, “Yes, it does.” I’ve been married for almost 30 years, so I have the social capital to answer that direct question honestly. If, however, she says, “How do I look in this dress,” I’m NOT going to say, “Fat!” I’m going to say, “It’s not very flattering” – or something ambiguous like that. If she says, “Do you like this dress,” I’m going to say, “Not really. It does’t bring out your best qualities very well” – or something similar.
The scriptural reference I would use to highlight this concept (Matthew 10:16) is about missionaries, but I believe it applies to the general principle:
Behold, I send you forth as sheep in the midst of wolves: be ye therefore wise as serpents, and harmless as doves.
About "controlled honesty":
In the temple recommend interview, I can be totally honest in answering the questions the way they are asked – with a “Yes” or “No” – or, in two cases, “Not always, but I try hard.” My more extensive answers (those that detail exactly how I view each question and what my answers mean philosophically to me) might be different than the Bishop’s or Stake President’s – but I don’t care, because the questions don’t ask about that type of difference. They only ask if I believe, do, accept, etc. – with no deeper digging required unless I open the door and give the interviewer the shovel. I have no desire to do that, since I am totally sincere in my simple “Yes” and “No” answers.
This principle of controlled honesty is best summarized in the Lord's words in Matthew 5:37:
But let your communication be, Yea, yea; Nay, nay: for whatsoever is more than these cometh of evil.