Game owner and Resident Representative is moving to their own Switch, what's left behind?

Unfortunately, there is no way this ends where the same island is on your copy of ACNH.

Relevant Nintendo Article

You can link your Nintendo Account to multiple consoles. However, you can only activate one primary console per Nintendo Account. On a non-primary console, games that you’ve downloaded with your Nintendo Account will only be playable using your account. On the primary console, games that you've downloaded with your Nintendo Account can be played by all users on that console.

If you continued to play your game normally, and she were to set up ACNH on her own switch with her Nintendo Account properly affiliated with it, you would eventually lose access to play with any account but hers.

Why?

The game is (likely) linked specifically to her Nintendo Account as her Primary Console. This means that anybody who uses this console can play the game.

After she re-assigns everything to this new switch, your console will become non-primary.

As such, only HER account can be used to play the game.

Everything you want to save needs to be transferred to her resident BEFORE she signs in. At that point, you could play the game regularly as her so long as her account information is valid.

I spent several hours on the phone with a Nintendo Rep trying to get myself as the "Main User" of the switch instead of my daughter (She hopped on my "account" to play her games when we first got it, and I wanted her to keep her save files. So I just renamed it and made myself a new one. We got stuck in a cycle of buying games on her account. NOT worth saving her 20 minutes of Odyssey gameplay!). . . So I've gone through every scenario I could think of with Nintendo for legitimate purposes.

Is this the only game she's bought on this Nintendo account? Perhaps you could negotiate a transfer of ownership. (Probably against Nintendo Terms)

Fast forward, and now the move has happened, with the following result:

• After she made her own Switch her main one, I could no longer play the game.
• When I bought the game myself (a physical copy) I could play again, on the same island with my old character.
• I did have to redownload some free DLC from the store.
• However, I couldn't play as her character until she logged in again with her new password.

Since she did that, it's all pretty much smooth sailing. I can even play with her character at the same time that she's playing the game on her new Switch/island/character. I can visit her island with my character and vice versa. The only limitation is that her characters can't visit each other, it results in a vague error popup being shown when that is attempted.