IMO it’s probably most likely an overzealous bootleg detection system hitting a false positive or someone selling a really convincing bootleg.
Don’t get me wrong, Nintendo absolutely wants to kill the used market. Iirc multiple executives have been on record voicing opposition to the used game market. But I definitely think it’s more likely that they got a false positive on the “is this game pirated?” detector and nuked the console.
That’s only if you’re a person from outside that was put into the simulation. If we’re all just simulated beings we’d never know.