Might as well continue with a bit of thread necromancy.
We saw similar things on iphones and the like -- while not quite as hard to get in it was still a privileged position being used to distribute code the device creators (might I say owners?) did not like. Mostly things like putting hotspots into innocuous things like torch programs, though a handful of emulators also appeared. Some people have had some fun with Steam too by utilising developer grade accounts.
In the case of the Switch it would also have to be chained with another attack -- games for several systems now run at a lower permissions level than the firmware/operating system. Now a fully programmable environment within a game that could be used to fuzz things might be nice for the exploit developers (and those looking to explore hardware), and theoretically you could probably get commercial games going on similar to first things people did abusing file replacement methods (I presume this hypothetical game would have access to all the hardware "just because" or could liven it up lest it end up like the earlier DSi homebrew efforts where aspects of the hardware the base game did not have were not available).
As far as Nintendo's actions. Would probably ban anybody that utilised it for anything too notable, would probably blacklist the game from future firmwares or sandbox it heavily (if not outright remove the aspects of the code in an update and force the update to be applied to run). Don't know if they would sue the devs of the game (I imagine there is some kind of good faith clause in the contract that would open the door for it), and don't know if the devs would be in that much trouble in general (I would say far worse has happened, and some of the things left behind by devs with an axe to grind have been rather shocking for the masses, but this would also fall under the "you don't mess with the money" notion) or wind up on some kind of industry blacklist (maybe Nintendo but plenty of other devs, and the worst they are likely to do here is "they can't work on the port or any exclusives").
