Not surprising that they are trying to prevent piracy, but this sounds like it'd adversely affect modders too.
The agreement for UK accounts now states digital products are "licensed only for personal and non-commercial use", and that any "unauthorised use of a Digital Product may result in the Digital Product becoming unusable".
This differs slightly from the US, which states: "You acknowledge that if you fail to comply with the foregoing restrictions Nintendo may render the Nintendo Account Services and/or the applicable Nintendo device permanently unusable in whole or in part."