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1.
A polite way of saying that an event or action may:

a) Cause an employee to experience a wealth of bad internal or external PR that could limit future promotion opportunities.

and/or:

b) Cause the employee to get fired.

This definition can also be used playfully amongst colleagues suggest how unfavourable a certain option may be or the relevant risk involved.
"I'll back up that computer before I run that update on Jim's computer, accidentally breaking the CEOs computer could be *potentially* career limiting."

"I agree, stalking that cute girl from HR might possibly be career limiting."
by Matthew1471 April 10, 2009