I recently had my switch modded, but to reiterate, it is okay to use Pokémon HOME in CFW, provided you have legitimate copies of games you are transferring to/from?
Using JKSV, I have digital copies of Brilliant Diamond, Legends Arceus and Scarlet and have physical copies of LGPE and Shield. And as long as I'm only using Pokémon HOME for transferring purposes (obviously no illegal Pokémon) - WITH the games I own, there shouldn't be an issue?
The only time I would really want to use the stock side of the switch is to participate in harmless things like Pokémon events via Mystery Gifts and Tera Raids