There is obviously such a thing as going too far, but it's kind of hard to draw a clear line. In a good faith context, laws and precedents can change quickly, sometimes based on the whim of a judge, and there are many areas of law where there is no clear precedent or where guidance is fuzzy. In those cases, it's important to have severability so that entire contracts don't have to be renegotiated because one small clause didn't hold up in court.
Imagine an employment contract that contains a non-compete clause (ignore, for a moment, your personal beliefs about non-compete clauses). The company may have a single employment contract that they use everywhere, and so in states where non-competes are illegal, the severability clause allows them to avoid having separate contracts for each jurisdiction. And now suppose that a state that once allowed non-competes passes a law banning them: should every employment contract with a non-compete clause suddenly become null and void? Of course not. That's what severability is for.
In the case in the OP, it's hard to say what the context is of the threat, but I imagine something along the lines of, "Unauthorized access to our computer network is a federal crime under statute XYZ punishable by up to 20 years in prison." Scary as hell to a layperson, but it's not strictly speaking untrue, even if most lawyers would roll their eyes and say that they're full of shit. Sure, it's misleading, and a bad actor could easily take it too far, but it's hard to know exactly where to draw the line if lawyers couch a threat in enough qualifiers.
At the end of the day, documents like this are written by lawyers in legalese that's not designed for ordinary people. It's shitty that they threatened some college students with this, and whatever lawyer did write and send this letter on behalf of the company gave that company tremendously poor advice. I guess you could complain to the bar, but it would be very hard to make a compelling case in a situation like this.
(This is also one of the reasons why collective bargaining is so valuable. A union can afford legal representation to go toe to toe with the company's lawyers. Individual employees can't do that.)