While I completely agree with the general hacker consensus that you should be able to do whatever you want with your hardware, up to and including buying and selling mod services, I cannot for the life of me understand this guy's thinking.

He's running a business modding people's devices, Nintendo catches on and sends him a cease and desist, and so he stops. Congrats, you have narrowly avoided certain financial ruin, and made a bit of cash in the process!

All forms of business and economic-self-preservation logic would tell this guy to continue ceasing and desisting, but he opens the shop back up shortly after and Nintendo, as they are known to do, sues his ass off.

What exactly did he think was going to happen here?

I'm inclined to agree with you. I modded my Switch. I steal from Nintendo whenever possible. I think they are a terrible company, but this guy should have known better.