Not true, it simply raises the investment bar. Let's say that at present a currency is inflating at 5% per year - that means any investment where the expected (risk-weighted) return is better than -5% is worth considering. If instead the currency is deflating at 3%, then only those investments with an expected return of better than +3% are worth considering. That does mean that low yield investments will tend to stagnate, but the high yield ones will still do fine.
You're also conflating money supply with inflation/deflation: Let's take a hypothetical world in which there's a fixed amount of the One True Currency (OTC) which is the only medium of exchange. That does NOT mean that the value of the currency will increase, decrease, or stay the same - THAT will depend on the total value of the economic activity. Lets say that initially the economy is growing at 10% - the value of the OTC will likewise grow at 10%. And since it's hard to find investments with a 10% expected return, investment will begin to stagnate. For the sake of argument lets say that directly implies that the economy will stagnate as well (there's a huge debate to be had there, but let's ignore it for the sake of simplicity), so next year the economy grows at only 3%. So now the value of the OTC will likewise only grow at 3%, making far more investments become viable, and the economy stagnates less, but perhaps not enough to avoid sliding into decline. So the next year the economy shrinks 2%. Wham - now the value of the OTC is shrinking at a 2% rate, and even investments that are only expected to break even become more attractive than sitting on your money - we're back into the current inflationary currency situation. So investment picks up, the economy begins to grow, along with the value of the OTC, and we're back into a deflationary scenario. Basically the economy would tend towards the historical norm of equilibrium rather than the perpetual growth that has characterized the last few centuries.
But of course that scenario is based on there being only one currency to deal with - which is unlikely. Without oppressive regulation there's nothing stopping people from creating alternatives, and at least some of those alternatives will inevitably go on to capture a share of the total economic activity - thus reducing the percentage of activity conducted in OTC, and with it the value of the currency.