Not really a matter of fit. More a matter of not all the additions coming out as good as intended. Cause technically 2 has a number of features X does not that make it the more demanding game it is. Godrays, improved lighting, ambient occlusion, a new rendering pipeline, better handling of materials, new folliage solution, improved texture filtering, volumetric cloud simulation, new water shaders, screenspace reflections, higher quality shadows, TAA. Overall an engine much more in line with current generation standards. But it seems not all these additions went smoothly. A lot are welcome but some came out rough. TAA I hojestly think is the worst result. The blurring artifacts are very noticeable in a game with a pulled back camera.
So it seems they've gone back and built a new rendering engine to replace this one to address all this. Bolting new stuff on is faster but never as effective as building a new one in terms of implementing new features. It's not always practical but I think in this instance it's a good move to prep for the future.
God rays were already in XCX, and while XBC2 did add new rendering features, it also had a lot of rough spots; the framerate was never as stable as XCX, and the character models and textures wouldn't have looked out of place on PS3/360. The engine just never quite seemed to sing on Switch the way it did on Wii U.
I don't recall godrays in X but I may just have never noticed. And character models didn't decrease in polygonal detail much really. If at all. And while skin, hair, and eyes feature a simplified approach in textures, clothes are very much the same level as X. And besides, the character models have never been the hallmarks of Xenoblade's technical achievements; X's also wouldn't look out of place on the PS360. And any decrease in character model detail is offset by the general and sharp increase in overall scene detail and the fact that you have 6 of them running around in your party vs 4. And the baseline texture res overall is higher. Noticeably so.
Again, got nothing at all, whatsoever, to do with the Switch. It's the features that were added. That's where the improvements come from, that's where the rough edges come from, and that's obviously where the performance issues stem from.
They could have left the engine the same and it would have performed the same. But they chose to push it with new visual features. It has rough edges but thd game has rough edges because it is a flat out more technically advanced and demanding game than X.