I kind of understand why they would rather break their USBC support intentionally and make it very clear that video out is only happening with their dock. Especially considering their audiences.
At that point, why use USB-C for the dock connection at all? Just use a proprietary connector if you're not going to follow the standards.
Having a separate USB-C port for charging should satisfy e.g. the EU regulations requiring that, I think. (Assuming that is the reason they used USB-C in the first place)
To satisfy charging expectations with the same port as display that they decided to do something proprietary with. On the flip side, why not do that when people will buy the console no matter what?
They are following the standards. They don't have to communicate with devices that they don't want to communicate with. There's no requirement in the USB spec that connected Type-C compliant devices interoperate in all cases.
What about it is "very clear"? It worked on the Switch 1, it's expected to work as it's USB, there is no error message, it just will appear that maybe the USB dongle or HDMI cable or whatever is defective.
The Nintendo Switch wasn't super picky about docks, but in order for external display to work, the dock had to support the mobile DisplayPort protocol that Nintendo used, "MyDP" instead of vanilla DisplayPort, which is what most devices supported at the time the Switch was released. Again, that wasn't a non-compliant thing on the part of the Switch, the Switch just used a technology that wasn't commonly used by much else, which is very commonly done by Nintendo.