Nintendo is adamant about destroying our reselling rights. I'll continue skipping this generation.
I remember when this MIG mod got released people were saying buying used would now be a roulette as Nintendo can spot the duplicated cart when it is used online and blacklist your switch. Not sure how often it ended up happening, but at least once it seems from this article.
Can't say I'm happy with how Nintendo is dealing with physical games, which means I'll need a really good reason to buy a Switch 2 myself. But Microsoft (and to a lesser extent Sony) are trying harder to kill physical sales and resale.
Nintendo at least have some skin in the game as they have the largest percentage of physical sales compared to Microsoft/Sony.
I think they cannot spot the duplicated cart specifically, they just see the same "cart" (or key) used twice or multiple times at the same time and block it and possibly all devices involved.
Not defending Nintendo, but I believe it is technically impossible for them to distinguish between the pirate and the victim.
Given their obsession with piracy/emulation I wouldn't be surprised to see them completely abandon it in the future and just have the cards be license keys like Sony/M$ currently do. We'll see i suppose.