For the sake of science I will be the Guinea pig to determine if updating backups will result in a console ban. Since I haven't found anyone else who has done it, I figured I might as well be the one.
Some data before we start:
OS: 5.0.1 before SX, 5.1.0 after (I will explain)
SX OS 1.2
Region EU
Nintendo account with transactions well over 200€*
Legit physical games owned: 6
Digital games downloaded from eshop: 7
Steps taken:
Switch used normally for 3 months.
Monday June 25th SX OS purchased and installed on console. Device has been in flight mode with WiFi connection data deleted just in case.
Backups downloaded and ran for 2 days in flight mode.
June 27th I purchased a 128gb card which was formated exFat. Could not find a way to format FAT32 so I rebooted my device with an empty SD card and performed a system update to 5.1.0 in order to use it. No logs were cleaned, I just booted into OFW by turning it off and on. While I was connected to my WiFi for the first time since SX OS being installed I checked if I could access the e-shop and I could, no issues.
After update I turned console off again, put required files back in SD card and ran SX OS, with backups once again in flight mode with WiFi settings deleted.
Today June 28th I removed the SD card with SX OS from my system and rebooted to OFW, again no logs cleaned. While in OFW with WiFi on I unlinked my Nintendo account from my user profile and proceeded to update a bunch of my pirated backups.
I will return with an update on whether or not I am banned. Currently I'm still good.
I will create a new dummy Nintendo account as I plan on getting a new switch probably later down the line and I'd like to not lose my purchases if I end up banned.
As you can see I have only used SX OS 1.2, only offline, going once online to update my system firmware and then again to update the games. I have not played with any backups online, I have not even played splatoon online which I legitimately own, I have been offline the entire time.
I believe this the most detailed and concise experiment regarding backups being updated and I hope by the end we will have concrete proof regarding the matter.
*Notes: Some people have said that there is a chance accounts with a healthy transaction history might be getting special treatment vs someone who has never bought anything, so I figured that might be a variable worth noting