It's not awful advice but it's definitely risky. Probably okay when you are a small one-person shop with nothing to lose and no significant assets but maybe not acceptable for anything larger, unless everyone is on board with the extreme risk-taking.

That said, agreeing to onerous terms and having the company actually enforce them later are two different things. This is a good explanation from an earlier HN thread: https://news.ycombinator.com/item?id=6366912 (yes, it's the pud 'Fucking Sue Me' thread which is evergreen).