Interestingly I have always wondered about this as it has been in vogue since I was little. But when I was an apprentice a man I worked with (Harold Morriss) who was an ex Sgt Flight Eng, RAF during WWII He told me that during his training, the RAF had them run Car engines in the classroom using different fuels and mixes. These included things like Petrol and Castor Oil, Petrol and Sugar. He told me he was amazed how well the engines ran.
Well this generator Honda I think didn't run too well and they had to get a new unit, this was while they were away, so the couldn't do anything about it other than buy new, but I'm sure if it happened at home base one could tinker and get it going.
The Snopes report does not state if the fuel they tested the sugar in had ethanol in it - if the petrol was E10 or E85 I'd imagine sugar would dissolve into the ethanol which is made from sugar?
Good luck.