For example; even if it was something high-value such as you purchased car, and unbeknownst to you it turns out to be a stolen car. You are not subject to arrest for having unknowingly purchased it, and there is no probable cause for arrest. By the same token: the police are going to take custody of the car and return it, and in general your recourse will be a civil lawsuit against the person who sold you the car, which can only proceed to discover and trial after the conclusion of any criminal charges and investigation against the seller are resolved.
Actually, in real life, you're likely to be arrested for driving a stolen vehicle. Even if you legally purchased it from a dealer. Or you legally rented it from say, Hertz (not saying them because it happened, but...).
The police are going to arrest you and then you're going to spend a few days in jail until its figured out that you're innocent in all this. Even if you did buy it off a dealer (who bought it off someone else who bought it unknowingly stolen). Or you rented a vehicle the company reported stolen but then failed to clear the report.
So yes, you may be innocent, but you will have your life turned upside down for a few days. And that's if you're lucky - you might spend longer in jail.
Let's just say that it's no longer possible to claim the MIG Switch is just "a backup tool" because it's been proven now that people are ripping games and then selling the original cartridge back (which is a violation of copyright law - it's a legal grey area to do the ripping, but it's pretty definitive if you rip a copy and sell the original). Now, most people could get away with it back when Nintendo could only detect it when two people went online simultaneously with the same cartridge key. Now though, Nintendo seemed to have improved their detection.
Chances are this is going into a huge database that's going to be levelled against anyone making or selling the MIG Switch because it's obviously not being used for "legitimate backup purposes".
Chances are those banned Switch 2 consoles were the result of a similar sting because Nintendo caught people using game carts with the same serial number. Maybe they detect the MIG switch. Or maybe they detected that some cartridge was played consistently in Florida for the past several years, then suddenly popped up in San Jose, with the one on San Jose having run games that were played in New York and Seattle.
Even better is Nintendo didn't really say anything at all - they're letting the news hammer it home - people using the MIG Switch are setting their consoles banned and promptly returned open-box to retailers. Then this happening (which unbanned the guy relatively quickly from a call to customer support once he sent a photo of his used cartridge). It's now on the MIG Switch guys to have to reassure the public that they didn't just devalue used consoles and games.
As a bonus, they likely got some other user banned who was probably happy they "got away" with a MIG Switch and not getting banned.