As a reminder, Xenoblade X on Wii U - which serves as the basis for Xenoblade 2's engine - runs at a native 720p. For Switch users playing docked to your flat panel, resolution remains at that same level, despite reports of dynamic resolution scaling.
However, everything changes when playing in handheld mode and image quality takes a nose dive. Unlike docked mode, playing on the go sees the developers deploy a dynamic resolution solution. The results range from 552p or so to 432p and even as low as 368p in some cases. There are probably other values in there as well but it's clear that this is not a game that ever comes close to reaching the native resolution of the Switch's integrated display. In fact, this is one of the lowest resolutions we've pixel counted since the PlayStation Vita era.