It's not the update per se IMO but due to a potential mismatch in records between your switch and ninty's end. Officially, the only way to update OFW is by contacting ninty's server and retrieving said update, thus leaving a record on their end. But if you use daybreak, there's no record of your switch ever contacting ninty's server to retrieve said update yet you somehow managed to get it updated. Whether ninty bans for that though is up for debate and the question is honestly a hard to answer one. You will get both yes and no answers if you look it up.
Bear in mind that not everyone who gets banned because of x/y/z will report it and even those that do, it's hard to say if it is actually that particular action that they think got them banned or another thing. Even for those who have yet to be banned, it's hard to say whether they have been tagged by ninty and due for a delayed ban (because ninty doesn't always ban immediately).
You can also update via cardridge which would be offline without any connection to nintendos servers, or via switch to switch transfer, so using daybrake should be safe. The update itself could only be a problem, if someone is suddenly on a lower firmware, and even that is not clear.
Mostly its general telemetry that suddenly changes when you restore, like playtimes, errors send to nintendo and so on, which can potentially lead to bans. The relevant telemtry also stays when you do a normal factory reset btw.
got a question about save cloud. if i hack a switch and download my cloud saves on a hacked switch and re-upload them would i get banned? the reason i'm asking is because i have some games that are only offline play and i would love to move those saves with a hacked switch.
If you use it on a clean nand (no nsp or xci isntallation), that can normally connect online, its not a problem. I already did that in the past for someone that got his modded switch banned. Just boot into a clean atmoshpere on your online nand of the modded console, so best the default config that comes with atmosphere, without any weird all in one packages that might include signature patches and homewbrew that installs itself on the system that you could accidentally boot into.
Atmosphere is build to be used safely online with its shipped defaults.
I'm using my switch just in CFW for many years now, but I'm also not using any XCI or NSP backups or cheats.
Any usage of CFW/homebrew can get your console banned when you go online such as when you download your cloud saves. You can get banned but you could also not get banned as bans are distributed randomly. Determine which is worth more to you; access to online functionality or your cloud save data.
Its not realy CFW/homewbrew usage or random banning, its specific things done within CFW or payloads. Atmosphere is even targeting specifically being able to go online with its defaults, which is one of the reasons they are like they are.
Some problematic things are for example XCI/NSP installs of any kind (backup, pirated or homebrew), which will likely lead to a ban quickly.
Same for things negativelly affecting the online experience, like cheating and unsafe public romhacks while online or save game editing in the wrong games.
System restore can also lead to bans because of telemetry differences, through since atmosphere block some of it, it might be less of a problem with people not booting into stock, but about that I'm not sure, since I don't know the specifics about whats blocked and whats not blocked.
Atmospheres reswitched discord has a full list of things that are likely problematic.