I don't think that's really the case, but I do think it's common for good software engineers to move into other job titles (whether it's "founder" or "management" or "architect" or "software consultant" or a deep specialization in a particular subfield of software like security, deep learning, data science, data mining, compilers, databases, graphics, etc.) where they can avoid the salary cap. There's an adverse selection effect on those that don't; employers are likely to ask to themselves "Why are you still making $150K/year as an employee rather than $500K/year as a consultant, $2M/year as a deep learning specialist, or have retired as a founder? Did you never develop any sort of deep expertise worth paying you for in your 8 years as a software engineer?"

People going into software should plan accordingly. You get great wages to start, but you need to save some of those for a potentially risky mid-career transition where you specialize in a particular subfield.

It's not the latter. Additional years don't matter as much past 10 or so... you're kind of doing the same types of things over and over as history repeats itself.