This was way more confusing than it had to be.
TL;DR: You can lend your digital games to friends & family for 14 days, but both consoles need to connect locally to enable this…(?)
You can’t play digital games you’ve lent out during this time. I guess the point is making it similar to giving your friend a physical game cartridge.
Hey, I’m sure it solves a problem for people, but the easier solution is still just the absence of DRM, as much as Nintendo would not like to do it, and it introduces exactly the kind of complexity that Sony mocked 12 years ago.