The firmware on a 3DS is an operating system. It provides standard features that games can use, and continues to run in the background so applications can multitask. While that doesn't tell us exactly why Ridge Racer is being affected, apparently it was doing something that was okay in the original firmware but with the new features of the new firmware it causes a conflict.
The 2.0.0_U update enables automatic system updates, so the mid-month update to fix Ridge Racer should be automatically applied once it's available.