It's more of a step by step thing. There is so much debt denominated in USD in countries across the world taken from governments and private companies. I case USD has massive gains compared to other fiat currencies, the business face sort of a death spiral

1. More debt and interest is needed to pay
2. Less profits or even losses for the companies
3. Less funds for R&D, re-investing and lot less investments and new ventures in general
4. The economy suffers. Growth rates go down. More unemployment or at least less free cash flow for expensive items/luxuries
5. Less profits or even losses for the companies
6. Eventual bankruptcies
7. Less profits or even losses for the companies
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   IMO the USD will have to have some massive gains for this type of scenario to become real and actual wreck the world economy. A smaller versions of this scenario can happen in countries that get their currency massively devalues. But crashing world economy will mean USD will have to have massive gains compared to every other currency. Maybe right after WWII this was possible. But currently there are economies outside of USA that are strong enough to prevent such a massive spike.

The theory is mostly used to justify the inflationary BS to justify printing more money. It's not an impossible scenario. But it's mostly just Keynesian fear mongering. I don't see USD being strong enough to crash the world economy in any recent time.