Of course it's not career suicide for a software engineer, and recruiters that make such claims should lose credibility with a candidate when they say these things. The recruiter counteroffer "script" ("career suicide", "you'll be fired once they can replace you", "you'll never get a promotion", "you'll be an outcast at work", etc.) is all stuff that could happen (other than the suicide part), but is highly unlikely just based on how many times we hear anecdotes about a counteroffer working out and the person staying for years.

Counteroffers are still a fairly common way to get a raise in software, although I think now that there is much less stigma to "job hopping" candidates are just as likely to move to new companies to get the raise.