There was a change because Nintendo's sales strategies with the Wii U and 3DS weren't working out for them,they were losing their audience
They realized most of their audience are adults now unlike the 90s /early 2000s and they simply allowed all third party companies to publish their stuff unchecked thats why there are so many Otome games on Switch now,why they publish Bayonetta and let tons of violent M rated content.
Most of these games on the eshop aren't actual porn they are standard visual novel stuff that appeals to a niche audience
It doesn't really damage their image,or the quality or their games heck they are about to release a first party visual novel about a serial killer wearing a paper bag who murders high school students
Nintendo hasn't cared about censorship in a long time, they help the ESRB to allow more content its just that their main brands appeal to the whole family and target audience was casual gamers,they changed focus to core gamers with the Switch