That means the monitor tries to change its own role from USB host (which it defaulted to because it's the power source) to USB gadget. And the Switch rejects the request because it sees itself as the USB gadget (for example to exchange data when you connect it to a PC).
The article itself also says "Our monitoring of the interactions with the USB-C monitor shows that the negotiation does not even get to the point of the Vendor Defined Messages(VDM)" so I see no hint of foul play by Nintendo. (And why would they? They are not in the business of selling USB monitors.)
My guess would be that the connection failure is due to a firmware bug in the monitor. But I am also heavily biased here because my last Asus screen had A LOT of firmware issues.