Yes that happens, but how common is it really? I've never heard of anyone actually doing that.It's becoming more common. I wouldn't say it's fully "common" yet.
I think the most public example was the recent gubernatorial election in Illinois. Incumbent Governor Pritzker donated money to a very far-right candidate, Darrin Baley, so that he would get the Republican nomination, and push moderate voters toward Pritzker in the general election.
It was all very well documented in Illinois newspapers during the election, and the New York Times did at least one piece about it, too.
The Times also noted that after the election, Biden gave a speech where he made a statement that this was not an acceptable practice. He didn't call out Pritzker by name, but if you were following the Illinois election, you know who he was talking about.