I'm just posting my use of it. It went surprisingly smooth. But Nintendo itself details how it all works including sharing games on more than a few systems using the old online check system.
What to do What would you like to do?
www.nintendo.com
There has been a lot of false information and people doom/gloom talking out their asses on this. I've been here almost 20 years on CAG. I tested it. It works. Nintendo says it works in their own revised documentation. There are videos demonstrating it but also videos where the people are clearly idiots rushing to make videos so they can be "first". We had one of those videos posted in this thread.
Somewhat related, earlier today I bought a bundle of games on the eshop (The Diabolical Trilogy, even though I own Riddled Corpses EX+ and love it, the other two games still made this a deal) and something new to this update (or something I've never seen?) is that now at time of purchase on the website you can direct downloads to ANY system you are logged into when purchasing a game. So since my oldest son's switch and my switch are updated, I could direct the purchase to his system or mine. Even though his system isn't my second system or anything and I haven't used my main profile on his system yet (just my jp account). Nicely it also says you can have upto 10 systems in the list which far exceeds the 8 limit of nintendo online family. I don't see any way to use this outside of at time of purchase, but it was cool I could buy something and pick where to install it instead of it just defaulting to my main system.
So, keep researching this. Get more feedback... but, it works. You sacrifice single game online play but you gain downloading to any system your profile is on at the time of purchase (that is updated) and then there's the whole virtual game card option which you can manage which games are installed on which of your two paired systems. I can now lend games to my kids without the online check (outside of during time of lending). I can also start using my switch lite again with the gamecards without having to do that online check crap anymore (which killed digital purchases on the lite for me since playing mobile means playing places I might not have wifi). Now I just need to update my switch lite.