Look people, you're supposed to "Expand Kong", not...
Nintendo's newest game is recreating an infamous experience of online console gaming - specifically from the Xbox 360 version of Uno.
The mobile device-supporting Everybody 1-2 Switch includes an option for players using smartphones as a controller to upload any picture from their phone to use as an avatar. There does not appear to be any form of filtering in place, resulting in offensive imagery being displayed if the player who uploaded the picture - as an example - finishes in the top three for a paritcular minigame. An example can be found here, though Nintendo World Report staff have seen it occur in several Twitch streams of the game.
Nintendo has yet to issue a comment on the matter, though what steps they can take to prevent the images from appearing short of disabling the option for unrestricted uploading are unclear. Similar situations using racial or sexual slurs have also been identified in games that allow text entry, despite the Switch having a hardware-level block list for language that is frequently updated.