Installing extensions in Minecraft on Nintendo Switch is limited in storage. Independent how much internal system and extended external free storage is available in the Nintendo Switch the game shows the message that not enough space is available for installing extensions. 
Extensions can be be payed with minecoins but then not downloaded. 

In my given example the payed extension from the internal shop is 26MB in size. The message (sorry that this is in German) says that there is not enough space to download and install it. The other attached screenshot shows that the game device has still 22,1GB internal and more than 200GB external storage free. 

There seems to be a fixed virtual space for the game that should be extended or assigned dynamically according to real available space.