Super Smash Bros. Ultimate stage builder mode lets you create and modify stages as you see fit. It also works through the touchscreen letting you drawn stages in various shapes and size. As expected, some people have started to exploit this freedom and sexually explicit images are being created to share in the stage builder mode.
Some of the examples of these images can be seen below. You can basically use the touchscreen to create the stages in any shape which is how people are able to create these stages.
It is possible to report this content so if you come across one, please report is so Nintendo can take action against the user by removing the stage.
In any game where user-generated content is allowed, explicit or controversial content ends up making its way to the game one way or another. We are seeing the same thing here with Super Smash Bros. Ultimate. It will be interesting to see how Nintendo cracks down on such content.