He might be refering to a counter attack by arriving Iraqi forces (division level) and other units from Saudi Arabia, Kuwait and Jordan. In earlier fighting, smaller Iraqi units were shown to be mediocre at best.
I think the potential for a successful large scale counter attack existed only on paper. The Syrian army was broken and with the exception of a Jordanian Brigade, arriving arab units simply did not have the skills to match the Israelis in a mobile counter attack.
I agree with your conclusion. That Iraqi counterattack got pounded into the dirt like nobody's business.
Was not completely surrounded. They were cut off with the Canal to the rear, the Red Sea to their right and the Israelis elsewhere, but the entrapment depended upon a very very narrow LOC across the canal. Remember when Sharon first suggested the action it was rejected for the reason that the link would be very tenous and could be broken easily. IOTL both armies had begun attempts to breakthrough. They do that and Israeli forces in Africa are screwed.
If it was so loosely bottled up, then why didn't it just break out back into Africa?
Adan's division had managed to slam an Egyptian attempt to hit the Sinai anchor, to the point where the Second Army almost had to write off an armoured brigade.
Then the Egyptian commanders weren't helping matters by playing games with just how many Israelis were crossing the Canal, and when they'd started, out of fear of reprisals from the government. That just slowed an accurate and timely response from Cairo.
To be honest, I'm not saying they could've taken Cairo or anything. But my thesis here is that without a doubt they could've pushed stayed in that position for another four or even six days. Reinforcements could be trucked in as well: the Syrians and Iraqis were all done, at least a brigade of Sho'ts could have been pulled out of the Golan and moved south to assist.