I've personally experienced this. Salary is taken as a proxy for ability.

After the dot com crash, I took lower paid work in the public sector, working on some interesting things.

I was approached by a recruiter to work for a company that was basically the best possible fit. They were working on a product category that I had helped to define at a previous start up, where I was the chief technical architect.

Once I told the recruiter my current salary, he was no longer interested. He even sounded aghast. Couldn't possibly put me forward for the role.