Neither is true
Neither extreme is true for most of us. Of course, one cannot say for certain that there isn't someone out there who is counting cards, spreading to thousands of dollars a hand and not ever getting backed off or barred, but such a case would be rare in the extreme. There are no doubt plenty of small stakes counters who rarely, if ever, encounter real problems with the pit, but I would guess that their playing or betting cover has very little to do with that and any such cover they are using is probably a waste of money.
As for busting hands with ball-peen hammers, that's stuff for the movies. However, if you are playing for high enough stakes, there are casinos who will handcuff you, illegally detain you, and physically intimidate you. Some casinos will revoke comps, forcibly eject you from your room or even have you tailed to try to find out who you really are. They don't need to do that, of course. All they have to do is tell you that you are no longer welcome to play blackjack in their store, but some want to intimidate a card counter to the point where he is fearful of returning.
Odds are that if you are going to count cards, if you play for high enough stakes, and if you win enough money, you are going to be backed-off or barred. In the overwhelming majority of cases, this will be nothing more than being told you are no longer welcome to play blackjack. It goes with the territory and should not be a thing to be feared. I would guess that more counters back themselves off through the fear of being nailed by the casinos than are ever actually backed off by the casinos themselves.