That rumor didnt really mean anything.
MS does its own chip customization in house, similar to what Apple does. They just pass along what they do to AMD and AMD puts it together. In fact there is a rumor that the scarlett streaming device will have its own custom chip in there developed by MS. Dont know if its ARM based or AMD though. But thats still a pretty big deal.
The chip work they've done, for xb1 for example, is small and additive vs the main bits of the SoC (CPU/GPU). That's not to say they couldn't now be taking AMD IP and designing their own custom chip more independently, but heavily adapting or customising AMD CPU/GPU designs on their own would be relatively new territory for them I think. You could be right though, maybe they don't need the same level of involvement to do what they want to do, be it because of in-house work or because the design is relatively straightforward.
A part of me would find it kind of exciting to see a vendor switch though - maybe industry people wouldn't like it so much (for porting) and maybe it would pose some extra hurdles for seamless BC, but having more different boxes available has a certain appeal.
Microsoft would never use Nvidia's API. The entire point of Xbox is to push Microsoft's API. It doesn't make sense that Nvidia or Nintendo would use NVN for a platform that isn't Switch, I mean the games would basically run on that system, I hardly expect you to be able to run a Switch rom (without encryption) on a new xbox. That's a Switch variant.
Why would nvidia shield tv have a different setting and run the same API as Switch? That should allow it to play decrypted Switch roms.
If NVN is Nintendo exclusive, then yeah, it would look more like a codname for some kind of Nintendo device.