If you can block every known Nintendo IP that the Switch reports too then you are good or have a firewall that blocks all traffic except for what you want (YT IP's for example). I recommend the 2nd option.
Hmmm. Only idea I have left is to install over USB.
If it failed to create a "placeholder" then for some reaosn it failed to write. Why IDK.
Also remember when installing you still have the .NSP and game installed so make sure you have enough memory on SD.
Also make sure you have removed...
Go to the "Dark" site (can't link it to you, just search for FW) and find the OFW you want and update using
ChoiDujourNX. I believe it can downgrade too but don't quote me. I'd research it.
SD card I use exFAT and I let the Switch format it. Second I wouldn't bother trying to convert XCIs as a majority have already been converted to NSP. Also there's no point in stay on FW 5.1. Just go to 6.2 as you are less likely to have issues with games.
Why not just keep Atmosphere at this point. Not sure why you are having this issue. I may be new a well but I believe writing a CFW to the Switch itself and having it saved is not possible, so no reason to have this issue. Can you boot into OFW and/or Hekate?
Let me assist you. I just upgraded from 4.1.0 with unpatched serial(hopefully you checked that too). I think there's an issue with any thing 128GB or greater involving Hekate but still researching not 100% confirm. Make sure Hekate will can read the contents of of the SD and load a firmware...