The frequently imagined scenario with IRV is that, in a two party system where most people will rank 1 of 2 parties first, then a small percent of voters can safely rank a third party first. This party is then eliminated, but not before a surprisingly strong showing (e.g. 5% first rather than the .05% we currently have). This would likely happen.
The problem arises in the next election, when the third party is now strong enough to command a large percent of first place votes. Since the party with the least first place votes is eliminated (even if they have a ton of second place votes), the third party now stands a real risk of cannibalizing votes from the next most similar "mainstream" party. If this cannibalization were to occur, both parties could lose to the other mainstream party that many voters might not have preferred! Due to this risk, it's likely voters would strategically rank the third party below the mainstream party even if that wasn't their true preference. In this way, IRV can still lead to 2 party dominance.