While I believe that Tears of the Kingdom was showcased on the Switch 2, especially as the pre-release trailers showed a much crisper image quality (as noted by Digital Foundry) than the final game, I find it hard to believe that the Matrix UE5 demo was running on Switch 2 with ray-tracing, unless it was using the DLSS3 Ultra Performance mode or upscaled 160p or something and running at 20 fps!
Let's keep our expectations in check here to avoid disappointment. Nintendo don't do powerful hardware anymore and since the GameCube, their consoles have basically been incremental upgrades over the previous generations rather than the larger ones you see from Sony and Microsoft. Yet the Switch and its games continue to sell well so Nintendo will not care about having hardware to rival Sony or Microsoft. They haven't cared for this long and had huge successes with the Wii and Switch so why would they start now? They really don't need to as their games cater for a completely different audience to Sony and Microsoft.
My hope is that the Switch 2 will ship with a dock that enhances the games for TV use, whether its an upscaling chip like DLSS or additional GPU hardware. It wouldn't have to be that powerful, just sufficient enough to output 1440p with some anti-aliasing and basic anisotropic filtering, two things that have been a rarity in most in-house Nintendo games. Something between the PS4 and PS4 Pro would be fine, I think.