The deflationary spiral argument goes as following: Let's imagine an economy that only uses Bitcoin, solely, as currency. When the productivity rises, the price of goods and services decrease.
This is perfectly how an economy should be run. because going by this no one will feels hoarding any currency is the next available option, we tend to hoard because of fear of the future outcome. nothing can bring down productivity as long as law of return on labour is effective.
People don't hoard if they're just fearful of the future, they do it because there's deflation; respectively when there's inflation. People consume by the belief that their purchasing power will decrease. Inflation harms the savers and deflation the spenders.
Bitcoin being a bit of a hoarding method is not really an argument made against bitcoin, it is argument made against using it to buy something. However, what you are forgetting is that there are people who have to spend it, like for example my boss pays me in crypto, he can't pay me in fiat, even if he wanted to pay me in fiat that would take days to get to me and would cost so much to get here.
It means that he has to pay me in fiat and usually more often than not he uses cheap transaction coins, and even in btc, he uses segwit bec32 addresses so it is cheaper. Long story short sometimes we need to spend it, even if we do not prefer to, because the alternatives are even worse.