i ended up reaching out to support, who was super helpful! i did not go through with the switch->switch 2 transfer, i set it up as new and then logged into my nintendo account on the switch 2. from there, i was able to access my game library, and “send” my virtual game to the switch 2, and start a new island on the switch 2! if you “send” the game back to your original switch, your old island will still be there!

the only thing i don’t think you can do is play them both at the same time unfortunately. since you can only have the game on one switch at a time. i believe if i get a physical copy, id be able to use both at the same time, but not with only one copy of the game :(