no components need to be removed aside from the LED in the joy-con, the components with highlighted yellow points on both ends just indicate that the wire can be attached to either side
First of all, I really like your idea. It adds more coolness to the Picofly mod.
Not removing the resistors would explain why the insertion detection isn't properly working.
I assume that the Switch uses this serial signal from the Joycon to detect if it gets inserted.
You're now tying up the output from the RP2040 directly with the output from the Joycon UART.
Afaik the RP2040 IO lines don't have an open drain mode so it will actively pull the signal up or down.
The joycon serial signal is said to 'float' at 1.8v when idle so I assume it does have an open drain mode.
If the RP2040 had an open drain mode, the signal would also float when it is not using the LED and the joycon would be able to get its serial signal across to the Tegra.
I'm no full time electrical engineer but I think with an additional mosfet or bipolar transistor, you can change the RP2040 line into an open drain mode line.
Also, this would allow you to have it operate at 1.8 volt (Joycon output) instead of 3.3v (RP2040 output).
You would need an additional mosfet connected to the LED so that it can also operate on 1.8v.
Not sure what would happen when the Joycon UART puts a signal on the line though.
In the worst case it might light up with some funky colors for a moment making it even cooler.
The Tegra which accepts the UART signal, can also operate at 3.3v so I assume that is why it has no issues with the 3.3v (instead of the 1.8v)
So technically no harm done with your current solution.
It's too bad there are no free pins on the joycon rail.
Not sure why it needed 3 GND lines.
Maybe Nintendo just linked all unused pins to GND.
You could hijack one of those GND lines.
Do add a resistor to the RP2040 IO line to the LED on the Switch side.
This will prevent any issues with unmodified joycons getting inserted into your modified Switch and pulling the RP2040 IO line to ground.