I can only find one source on this that isn't extremely recent[1]. It seems like it would only brick the device if you pirated and used an illegitimate copy of the custom firmware.
Well that definitely makes him an asshole, but not a prison-and-then-life-of-crushing-debt asshole. Is copyright law really this fucked, that someone was extradited and made an example for selling a ransomware chip?
[1]: https://wololo.net/2018/06/25/nintendo-switch-team-xecuters-...