I'm definitely interested in seeing how this one turns out, for the reasons you stated. I've been keeping my eye out for these type of games that can change our perspective on what is feasible on Switch. And this could very well be one of them.
I don't know how much it would do for other developers, because I recon many of them who are interested in porting games to Switch will run some internal tests.
But at the very least for us who like to speculate about these sort of things, it could be an interesting reference.
Sure but the game runs on UE4 and considering Switch supports UE4 and that the engine is scaleable (I believe?), this isn't exactly an overly difficult port to do.
Something like RDR2, or even not open world would be a better test case. Anything UE4 is pretty much fair game for Switch and hardly surprising if announced for the device.
One Unreal Engine 4 game can greatly differ from another in how demanding or scale friendly they are made to be.
If the game dictates that there are let's say 13 enemies at once on screen for story purposes (The 13 Organisation members from Kingdom Hearts as a made up example) then its impossible to remove any one of them to enhance performance.
But removing objects, whether it's in the form of increased draw distance, or just permanently, is something developers some times have to resort to in situations where lowering resolution, textures, effects, etc isn't enough. (At least while maintaining a visual standard they don't want to drop below.) So then they'll need to come up with more creative workarounds.
Anything UE4 isn't even fair game for Xbox One X or PS4 Pro theoretically, if the developer wants to go that route.
But realistically there's little reason anyone would release such a demanding game.