Will a System Transfer be completed if my New Nintendo 2DS XL is faulty and is exchanged?

Nintendo will not be liable for the loss of any saved data or user generated content on your New Nintendo 2DS XL which occurs either because of defective materials, workmanship or manufacturing or as a result of the replacement or repair of the New Nintendo 2DS XL in accordance with its warranty. Nintendo recommends backing up any saved data to a microSD Card.