It certainly doesn't exclude it. But many people do hack their console to avoid paying for games or to develop emulators that allow people to avoid buying the system itself. And Nintendo certainly seems to be convinced that it happens enough to mater. While I agree there should room to let people tinker and play the way they want, I think Nintendo should also be allowed to try and prevent piracy of their games.
PixiePoop
No, because that's not the main goal of these kinds of documents. This is a broad enough definition of what might happen when you tamper with your device that might protect their ass in court should it ever get to that.
But it doesn't really imply they have a kill switch. Their currently used, fully locking devices out of the Nintendo servers, can already be seen as turning the device "permanently unusable in whole or in part". Especially with how digital and online focused consoles have become.
I agree with it probably just being preemptive legal defence. Even their current used solution, being fully locked out of the Nintendo servers, is probably enough to be seen as "rendering a console partly or fully useless" should it ever need to be litigated in court. Especially with so many games and functions being online, digital or card key only.
But I really doubt the 'burning an internal e-fuse' idea. Mostly because they can already achieve enough in online service and software alone that they wouldn't need such a fragile solution. They would really shoot themselves in the foot if they did. They would have way too little control over it themselves. A sudden swath of consoles bricking on a hot day would give them a bigger headache than the Joycon drift issue ever did. If not in the US, most definitely in the EU.
To me this reads as 'We might push an update that bricks your console should you have hacked your device." Which has been a risk when modding consoles for at least 20 years now. I don't think it refers to there being an actual kill switch. Just more legalese to further scare people from doing to and to reduce the chance of getting sued should it happen.
That said, with so many games being digital or gamekey only, and later games probably requiring system updates anyway, just being blacklisted from the Nintendo servers alone would already gut a console's functionality to the point it might as well be seen as one.
I haven't followed Soundcloud for a while, but from what I remember it already wasn't doing too well. To me this isn't just the nail in the coffin, but potentially also a last breath money grab. Get some data, and sell it before going down.