All spring-based joysticks can be pulled straight up a certain amount. It is an invariable byproduct of the design. If they couldn't be pulled up like that, then they would also not be able to move in any direction, by default.
Nintendo joysticks tend to be more noticeable in this regard than others because they have weaker main springs than most other joysticks, so they pull up easier. It comes in handy for Super Punch-Out, because for that game, a game function was retrofitted to the joystick's ability to pull up.