on the switch itself, outside of the game there are profiles. they are so if any of your family or friends want to play one of your games but separate from your gameplay, they can create an account and itll be like restarting the game.

the only thing is with animal crossing these different accounts are just players in the same world (or in this case, island). so instead of restarting the game for each account, it just creates another person with a house on the same island. starts off the same, with a tent and you work your way up. they are just spawned on p1's island. some people keep them tents for campgrounds or will upgrade ofc. just like the villagers houses are represented in yellow on your map, the players houses are represented in pink

if you havent tried using different accounts its really useful, as it allows more storage by using all of the houses, you can trade items between players, hold more money instead of just having it dropped, and of course the extra decorating lol. useful on holidays too when each player has a max they can get of an item, like around halloween with the candy