Why go back to LCD after releasing an OLED for the Switch, surely it's better to make this one OLED rather than releasing it with LCD and then making an OLED later down the road
Because the number of people who won't buy it because of the LCD screen is smaller than the number of additional people who will buy it if it's $X cheaper at launch.
Yeah, you need a balance when launching new hardware. Most people, specially Nintendo players, don't care about OLED vs LCD that much. So, cheaper > OLED.
That being said, I am not trusting any rumours, or even checking them out, so don't know what the article says, but if they do go with LCD, this could be the reason.
The rumor basically claims the dev kits have an LCD screen, it could be subject to change, but developers need to know how their games will look like on the screen, so if it's true the kits have this screen, then the console most likely will have it too.
Are developers that picky? If they are releasing their game on any other console or PC, the game has to look good on everything from a 2024 top of the line 5k display to a 720p LCD TV with the color saturation set to 200%.
Besides, this is a pre-release dev kit. I am sure that Nintendo cared more about nailing down the CPU, GPU, and memory. I am sure that they will send updated hardware to devs closer to release. If they suddenly switch to an OLED display, it is probably not too much work for a developer to adjust the colors in their game.