If the Tokyo Gameshow is happening and there are deals in place with third parties revolving around that, then it might be that Nintendo's hands are tied and they'll have to press on. It'll be bad optics, especially for the UK market, but if the ink is on the dotted line they may not have a choice.
If these don't exist or the issues can be sorted out, I'd expect the Direct to be delayed behind closed doors. Even leaving aside issues of respect, the point is that holding big marketing events at this time are kinda useless. Directs aren't just for us, they're a time for Nintendo to reach out to the world, and if the world is pre-occupied commemorating the death of a 96 year old, then it's best to hang fire.
I don't think people realise that this is a huge deal. Like it or lump it Lizzie was one of the world's most influential and recignisable figures. The UK is basically shutting down for the next 10 days - no sports, no shows, nothing. At work we've been ordered to cease all social media and postpone external events. No company wants to be the one seen to the living embodiment of the 'Oh no...anyway' meme, and that includes notoriously controversy shy Nintendo here.