The interface doesn't care what form the data takes. It won't be able to use the higher bandwidth, no, but it doesn't need to.
That's why you can get a tlc ssd for sata, after all.
I think Switch is using the ASIC Xtra ROM format, in which case, the device hardware is not seeing beyond the interface.
Now, regarding contracts, yeah, maybe, but if the savings are as good as advertised, it would absolutely make sense to get that production line running asap and start manufacturing current Switch carts on that tech. They wouldn't have been locked into a 7 year commitment from the outset given that they wouldn't have known that the Switch would still be a going concern, surely? There's no way Nintendo are happy with the haircut they're getting on Tears of the Kingdom cart. So maybe the savings aren't that great unless you move up to 64GB? I have no idea.
I genuinely think it makes more sense to make the transition mid gen if at all possible. To enable production to ramp and slowly transition. Because I bet there is zero production on ROM chips of these sizes outside of Nintendo wanting to do it. They are the only market for it. Which, I think, complicates things and makes that initial ramp a little scary.