How serious is 折杀 today?
折杀 is a folk saying. It is invoked as a humble response when receiving high compliments or a great gift that one considers himself not deserving of it.

In the olden time, Chinese believed one's fortune is tied to his deed and virtue, oversaw by the heaven. If you receive excessive reward in life that's not in an appropriate quantity or quality for your virtue, your fortune will balance things and make you suffer later in life. 

Similarly being immoral will reduce your fortune. That's why people sometimes refer immoral deed as '折福事' (things that reduce your fortune ) 


折 is short for 折福 (reduce fortune)
杀 = 'greatly' (to the point of killing me)
折杀 means 'it will greatly reduce my fortune'


If you receive a high praise or great gift that you think you are not worthy of,  you can say '这真是折杀我了' (this really will reduce my fortune greatly) to show your modesty and humility.

As you suspected, this term is a bit old fashion. You can only hear people saying that in period dramas on T.V or movies nowadays.