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Train wreck said:

From a cost standpoint, SE makes the most money...

Digital > Disc > Cartridge, so making the least amount of cartridges means the most bang for their buck. The game itself had a very limited budget and I am sure SE was not willing to break the bank on media production.

From a telemetry data standpoint they are seeing that demand for Switch physical for this game is low, so they are treating it on a case by case basis.

Any more than that would be looking at it from a fanboy prescriptive (Prior gaming arrangements, SE shipment/publishing aggrements, the Nin/Sq relationship in the SNES days, etc)

If the file size is under 8 gigs, there's no cost difference between disc and cart.  If it's under 6 gigs, it starts to be cheaper than disc.