Nintendo doesn't explicitly state what it means by making your device "unusable." However, there's a strong chance this is merely Nintendo's polite way of indicating that if a user breaches its user agreement policy, their Switch console could potentially be bricked (rendered inoperable) by Nintendo.

I like how the author's speculation is used as the headline, as if it were confirmed fact. That's super cool and useful and definitely not misleading at all.

Realistically, this sort of verbiage has existed on several consoles' ToS in the past, and I'm pretty sure nothing has ever come of it before. Here's the full term in question, which the author of this article couldn't be bothered to include for the reader to easily scrutinize for themselves:

2. License

Subject to the terms of this Agreement, Nintendo grants you a non-exclusive, non-transferable, revocable license to use the Nintendo Account Services solely for your personal and non-commercial use. For clarity, the Nintendo Account Services are licensed, not sold, to you, and you may not make use of the Nintendo Account Services except as expressly authorized by this Agreement.

Without limitation, you agree that you may not (a) publish, copy, modify, reverse engineer, lease, rent, decompile, disassemble, distribute, offer for sale, or create derivative works of any portion of the Nintendo Account Services; (b) bypass, modify, decrypt, defeat, tamper with, or otherwise circumvent any of the functions or protections of the Nintendo Account Services, including through the use of any hardware or software that would cause the Nintendo Account Services to operate other than in accordance with its documentation and intended use; (c) obtain, install or use any unauthorized copies of Nintendo Account Services; or (d) exploit the Nintendo Account Services in any manner other than to use them in accordance with the applicable documentation and intended use, in each case, without Nintendo’s written consent or express authorization, or unless otherwise expressly permitted by applicable law. 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.

As it's written, it seems that the actions Nintendo would take are flexible, and would depend on what, specifically, you hacked. And I say "hacked", because this is referring specifically to unauthorized access of Nintendo's online services. This isn't even talking about hacking your actual console, itself.

There's really nothing out of the ordinary here, and I'm almost positive that the same terms existed on previous Nintendo consoles, just in different words.