Interesting decision, especially at this point in time. I imagine they weighed the legal costs involved in a lawsuit and the likelihood that they would lose and decided to bite the bullet on free repairs. That's good, especially since lawyers are the only ones to really benefit from a class-action.
Not just that but also the PR disaster that it would be if they didn't try to fix it. This would end up being what the Switch is best remembered for, years down the road.