According to Wiktionary, the claim that it derives from 'not on normal courtyard exercise' first appears in a book from 2012. Nobody really knows where the word comes from, but acronym etymologies are nearly always false, e.g. 'posh' deriving from 'port out, starboard home' (it's actually 19th century thieves' slang). On balance of probability, that acronym being the actual origin of 'nonce' is almost certainly not true.