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It's more that the actual leftist party will take votes away from the liberals, but not the full-on nazi party. Meaning that you'd end up with something like 15% new leftist party that nobody dares vote for because it's new, 40% dems, 45% repugnants and now the 45% is enough for them to win, whereas previously maybe it would've been 55% dems.
In fact, to win an election under that system, it would be beneficial to start an even more right-wing party, because that would take votes away from the GOP. But at the end of the day, it takes a couple of election cycles for 2 dominant parties to emerge and the most extremist ones are typically the ones to lose as people unite under the more centrist banners. That's how you get republican and republican lite, where really a lot of people would prefer a socialist party and a lot of other people would prefer a national-socialistic workers party. They have to meet in the middle and get two parties that are somewhere between the two polar opposites.