Exploit description from Switchbrew:
This is huge because it gives anyone full permissions to any service in the OS.
Prior to 3.0.1, the service manager ("sm") built-in system module treats a user as though it has full permissions if the user creates a new "sm:" port session but bypasses initialization.
In 3.0.1, "sm" returns error code 0x415 if Initialize has not been called yet.
SciresM, a known 3DS (and currently Switch) hacker said on Twitter:
With this exploit, the Switch has been hacked. Now it's just a matter of time for the release of the first usable exploit for end users. Homebrew is coming.
It can't be understated how big this bug was. If you want switchhax, don't update to 3.0.1. It might take significantly longer if you do.
For context: the sm bug is what's enabled basically everything from game-romfs/savefile/sysmodule code dumping to even other known bugs. RIP