At minimum, it's wrong enough that it's silly to speak of it as if it has any real predictive power. Stalin said this in 1924, and while German Social Democrats sided with fascists over socialists around that time, World War II saw far more social democrats in far more countries side with the Soviet Union against fascists. The idea that "when the chips are down, social democrats will throw in with the fascists" runs contrary to the historical scenario where the chips were most obviously down, and when the fascists were most undeniably fascist. You can make a compelling counterargument about how social democracies acted during the Cold War, but even in the most charitable light that argument only gets us back to "this concept has no real predictive power -- different social democrats have acted differently in different contexts."

And today (at least in the U.S.), the concept is actively harmful to advancing the cause of socialism. To anyone who isn't already in some niche lefty forum, saying that the likes of Bernie Sanders are basically fascists makes you sound like a fucking crank. It doesn't matter how right you think you are -- if you sound like a fucking crank you aren't convincing anybody of anything anytime soon. If that's the stuff people hear coming from self-described socialists, people are going to think socialists are out of touch (and they'd be right). They aren't going to listen to what socialists have to say, and they definitely aren't going to want to identify as socialists themselves.