That's not a theory, that's how life usually works.
The keyword here is “usually”.
If the host infects other people long before the virus kills the host (and even before the host feels any symptoms, forcing him/her into isolation), then a less deadly strain will not have evolutionary advantage over the original strain.
Evolution doesn't work that way: even a bit better is enough.
And
usually is not a keyword, it is just like science works, it is all a matter of probability and self-correction in a feedback loop, there is nobody suggesting any truth from some mountain-top or whispering in the ear of some self proclaimed prophet.
In any case apart from the viruses biology (some of them is even useful against antibiotic resistant bacteria) I'm in no way promoting laissez-faire.
We are dealing with the life of real people and the most sensible thing is just to follow WHO guidelines (like China, Italy, Spain), because:
-1) even if you are young and healthy and so there are little chances you'll die of covid-19, little is not zero
-2) even if you are young and healthy you could transmit the disease to other people who could die
-3) herd immunity with 60% of positive cases (the proclaimed goal of the British government) is pure bullshit and will make people die by the hundredth of thousand in UK alone (if I'm not wrong, deaths there just doubled in a single day... so according to that trend in a couple of weeks they
might get there).