I took advantage of this offer over the weekend. Process was a little annoying as the ladies at the store were skeptical about letting me do the system transfer in store. So I asked if I could purchase the newer console, take it home and do the system transfer there, and return it the next day to get my refund. They allowed it, so basically they just refunded $225 to my credit card. If you want to do this offer, call and ask ahead of time if your store will allow you to do a system transfer in store. If they don't, just purchase it outright and take it home and do the system transfer there, then just bring your old trade-in Switch, along with your receipt and box for the newer Switch with you so they can process the trade and refund your card.
My original Switch was already patched based on the serial number, and I didn't have any intention to mod it due to playing online regularly. So "upgrading" to the newer model seemed worth it. Notice a slight improvement in battery, screen looks a bit more bright and the color temperature seems better than the original. Your results may vary depending on display manufacturers, as with all devices.