I see, thank you for the information.
I don't have custom firmware or anything on my Switch (I usually avoid hacking current-gen consoles because of the likelihood of breaking updates, network bans, etc.; it's just my personal preference) but I do on my 3DS, so I'd be using PKSM to put pokemon made with PKHeX onto my Ultra Moon save, putting those into Pokemon Bank, and then moving those to Home. If what you say is correct, then was the announcement made back in 2021 (I think) not really what it sounded like? I'm mainly trying to understand what the reality is, because things like this can get overblown on the Internet out of fear.
From what I've heard from you guys here, my understanding is that: 1. Since PKHeX's legality checks are so robust, there's (essentially) no chance of any pokemon that passes PKHeX's checks being detected as illegal by official legality checks, 2. Actual Pokemon-specific bans have historically only been done in more extreme cases of hacking (hacked raids, home accounts with tons of illegal mons), and 3. Full NNID bans (as opposed to Pokemon-specific) have historically only been done in the cases of Switch modification and/or piracy. Please correct me if I seem to have misunderstood anything.
I'm mainly worried because most of my friends don't have any form of custom firmware for any of their Nintendo consoles, so trading with them online on 3DS games I don't think is going to be an option forever (due to the closure of the eShop, and if it hasn't already been locked out; I'm pretty out of the loop haha), and if I want to give them legal genned pokemon through trading, I want to understand what the risks are so I can prevent them. If I got myself banned for hacking, I'd figure out a way to deal with it, but I'd feel absolutely terrible if I got one of my friends banned because of my mistake.