Switch currently runs in one of two modes: Docked and handheld. Games are written to expect those two modes, with rendering adjusted to those specifically and nothing else. Think of all the render settings in a PC game (in reality there are way more things the developer can adjust, but just for the sake of illustration), and assume there are instead two hardcoded presets which are selected based on whether or not the device is "docked".

For Switch 1 games, docked means "we're running as fast as the internal cooling can handle and outputting 1080p, assume the user can't use the touch screen and such". A dongle is fine here as long as you don't block the air inlets or exhausts, or place the Switch on something heat sensitive.

For Switch 2 games, docked means "we're running as fast as the externally boosted cooling can handle and cranking out 4k, and assume you can't use the touch screen and such". Assuming the fan does useful work here, then with a dongle you'll be thermal throttling and have a bad gaming experience - on a PC you'd turn down the settings, here those are hardcoded.

So, what about using the switch 2 handheld mode on a switch 1 dock, seeing it's the same resolution? Well, if you tell it to run in handheld mode it might assume you have access to the touchscreen, always-on VRR and HDR, is using internal speakers, etc.

It's totally doable, but to do this right the stack needs to be prepared for it. As such, I understand why they did it.

Heck, this was the same issue for the Switch 1, and it took a while for third-party docks to pop up. It'll take all but a moment for third party docks to support this.

Ah so the Switch 2 dock has an extra fan? I didn't know that.

Still, what happens if you connect a Switch 2 to a 1080p display? I assume it would render at 1080p, because rendering at 4K and downscaling for output would be too wasteful. Switch 1 even has a setting for that, allowing you to choose between 480p, 720p, and 1080p.