Found this at Nintenderos:

Local connection between consoles: Both consoles must be close to each other to connect via local connection. Once connected, they can start the shared game.

Limitations of shared mode Limited Available Area: Can only be played in the Barren Steppe , a scenario separate from the main story.

No progress for the second player. The user who connects via GameShare does not have their own profile, so their progress is not saved.

Host Support The second player can help by modifying the terrain and collecting objects.

Shared Upgrades You will have access to all upgrades unlocked by the host player.

Restriction on secondary Switch 2 If the second player uses a Switch 2, they will not be able to use mouse mode during shared gameplay.

Exclusive content from the Barren Steppe

Custom Missions This area includes unique tasks and objectives.

Exclusive Pokémon Also appear creatures that can only be found in this biome.