When you argue with your wife you don't pull any punches. Tell me how you feel about this project, please don't pull any punches.

To pull a punch means to throw a punch, but not as hard as what one is actually capable of. So, in an argument if someone doesn't pull any punches, it means he/she hits unrestrainedly with the verbal "punches". His/her arguments/statements hold nothing back. Eg: Bill didn't pull any punches when he told Gill's parents exactly where their son had been the previous evening.

Yes, your Italian translation is correct. It has the sense of "brutally honest", not just honest in a normal way. But it doesn't necessarily imply rudeness. When a boxer "pulls a punch", he deliberately restrains himself, and he doesn't hit his opponent as hard as he can.