We are now dipping into vague free speech territory along with the various ideologies that surround it.
This is user-generated content. With the same political impact as downloading Obama from the Check Mii Out channel on Wii or fighting on a custom map of Trump's head in Smash. Even if this time these islands come from official political sources, they aren’t making any kind of impression. That Fortnight video has 1,707 views and you can’t visit either AC or Fortnight Biden Islands without a code.
I think it’s a stretch to argue this was geared and targeted for kids. However, if The Biden Campaign partnered with Nintendo to send every Animal Crossing a hat that said “vote for joe” on it. I would say that’s clearly a partnership between politics and gaming and very much an issue.
Strategically I think this is politically meaningless, there is no Undecided voter this is going to win over. The only reason I remember the AC Biden Island is even a thing, Is because I keep seeing people bringing up it in comments sections to complain about its existence.