I heard about this being a thing but by the wording, it sounded like if it was something to do with the system only, like having 3 users on the system, and You have latest update version, meanwhile 2 people don't, and instead of logging into that user to update, is automatic to match the most recent one.form the look of it that will let you send the game update to other users over local play
like
you got MK8D fully updated but you friend has not
that new option should let you updated there version to the same as yours
by you setting up the group and letting them join it
Though it sounds silly when i explain it since is on the same system that it should just be updated for all users on the system. They could have explained better like "Now you can share your software updates with other players locally. This allows all players to have the most recent version of a game if they don't already." Or something like that. The part about creating a group was confusing, but i guess there was never any way to actually get the switch to communicate with other systems outside of a game that supports multiplayer mode. So they added a option to do so.
Geez what's next, 3DS type stuff like pedometer, and sleep mode street pass?