I think that it is a measure for Pretendo to sabotage your Switch and force you to buy another one if you still want to play Switch games.
For example, when they detect pirated games, they could brick the OS, burn the motherboard, or detonate the battery.
And of course they are not responsible for any damage caused by it.
They are and that would be pretty much illegal for them to do. When you buy it, the hardware is yours. For Nintendo to remotely change it like that, yeah it's pretty illegal and THEIR responsability, not yours