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After just 12 days, Nintendo is already nuking Switch 2 console accounts for players caught using Mig Flash
(www.tomshardware.com)
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Logo uses joystick by liftarn
Right, but the OP said being unable to go online to update the firmware made it a prime piracy machine. It follows that it has to be jailbroken to qualify as such.
But it can update the firmware.
According to those on GBATemp.net, the update server and the eshop server are both different. Your console being banned means it's banned from all the shop services, but console updates still happen.
I think console updates are semi-forced, so you'll still have to keep the Switch 2 offline and/or keep denying update prompts like usual, even if it's banned.
In that case, airplane mode is a better option.