I don't know about matlab specifically, but it's normal for an executable to treat all command line inputs as characters. It's normally up to you to parse the input and convert it to whatever type you want.
It's trivial to do anyway. You have plenty of options:
verbose = strcmp(theinput, 'true'); %if you only accept one case sensitive way of specifying the option
verbose = strcmpi(theinput, 'true'); %same but case insensitive
verbose = ismember(theinput, {'true', 'on', 'full'}); %if you want to allow several way of turning the option on.
verbose = ismember(lower(theinput), {'true', 'on', 'full'}); %same but case insensitive
