It seems for some reason Nintendo's in house games' HDR support seems to be more for increasing accuracy of colours and shapes rather than increasing brightness. Running on my QD OLED monitor, Breath of the Wild's Switch 2 upgrade does not look super bright with massive contrast (as most PC HDR would be), but you have things like the sun going from a white blob (on an SDR Switch 1 as well as an emulator) to being much more detailed due to the increased gamma value range. On Welcome Tour as well, the fireworks demo definitely shows much more detail in the explosions, but does not use the peak brightness of the monitor. Similarly, Switch 1 games look a bit more muted with the Switch 2's HDR output (compared to the tone mapping the monitor uses for the Switch 1's SDR output), but with colours closer to the printed box art and other sources. I think we might see future Nintendo published Switch 2 focused games try and use the HDR for a higher brightness output, or we might see the more accuracy same brightness trend continue. This is likely a development choice, and explains why Cyberpunk 2077 (a game with existing HDR on other platforms, where the tendency is for higher brightness with more "pop" with high contrast) looks quite different in HDR on Switch 2 compared to the Nintendo titles.

The integrated display is definitely not the best thing in the world, but it does what it needs to do pretty well. High refresh rate 1080p with some light HDR looks perfectly fine to me, and it definitely looks far better than Switch 1. It's very good for my usage. The brightness could have been higher though, considering this is a portable device that you might want to use in bright sunlight on the train or something (high end phone screens get 1000+ nit brightnesses for this reason, and as far as I know Deck OLED does at least 800 or 900).