Not quite. This holds only for Creo spells that actually create something (ArM5 p.113 box Targets and Creo).
Let's put away that - indeed impossible - T: Room CrIg that burns everything or not quite in the room.
But a T: Room CrIm or MuIm (I don't care which Technique, and probably neither does raccoonmask) covering the targeted room with an illusion can keep those friends, plus two chairs, a cupboard and the fumy air in the room, still looking the same: the magus just makes them part of his illusion with an appropriate Finesse roll.
Cheers