Those who have encountered a hacked Pokémon in Pokémon Sword & Shield need to be wary, as users on Discord are reporting that they are being banned online due to using, trading, and raiding with unobtainable Pokémon.
Pokémon Sword & Shield suffered the same fate as almost every game in the Pokémon series before it was released, as many of its aspects were leaked online and fell into the hands of dataminers. It didn't take long for all of the games' secrets to be laid bare, including the presence of Pokémon that could not be obtained through legitimate means, including the Bulbasaur line, the Squirtle line, and a number of Legendary and Mythical Pokémon.
Players have been able to add these unobtainable Pokémon to their game through hacking or trades, but it seems that Nintendo is cracking down on those using these illegal Pokémon on their online service. Members of the Pokémon Sword & Shield Discord server are claiming that they have been banned from online play, due to using hacked, unobtainable Pokémon in online battles, raids, and trades.
It seems that simply owning these Pokémon doesn't trigger any ban, but taking them online in any capacity does. This includes trading with someone who is sending over a hacked Pokémon, so innocent players could also be hit with bans. It's likely that Nintendo is cracking down on hacks because Pokémon Home is now available, so it would be a lot easier to trade these illegal Pokémon online if they could move freely. It's now possible to trade those unobtainable Pokémon into Pokémon Sword & Shield safely, but they still need to come through legitimate means, such as from one of the older games or the Let's Go! titles.
Hacked Pokémon have been an issue for a long time in the Pokémon series, especially when it comes to people wanting to breed competitive Pokémon or quickly filling out the Pokédex. The fact that so many Pokémon were unobtainable meant that fans were curious about how they would work and why they were cut in the first place. People remember the days when the kid who had Mew in Pokémon Red & Blue was the coolest person around and there was a brief period of time when Bulbasaur attained that status in Sword & Shield.
The unobtainable Pokémon are now legal through Pokémon Home, so the time may have come to bin the hacked Pokémon before more Switch accounts are hit with bans. Pokémon Home is available to download now.
Source: Discord