These performance issues were found to have two different causes. The first and more severe bug affected all Switch players. It was fixed in 1.10.0 and performance was greatly improved.
The second bug mainly affects games where the Multiplayer Game setting is enabled. Its most prominent symptoms seem to be pauses of several seconds when the game is autosaving, but there can also be brief delays at any time. During these times, delays may be observed when breaking blocks, opening chests, anvils, and other UI panels, and perhaps some other actions. This bug is difficult to fix so it will take a bit longer, but a team of developers is and has been working diligently on it.
Workaround: Users are reporting that the following workaround can temporarily restore your console to normal or near-normal performance for new worlds, at the expense of temporarily (until there's a fix) making your current worlds unavailable for play. I'm unable to verify this myself since I don't have access to a Switch, so use discretion when deciding whether to try this method.
- Backup your game data to the cloud using Switch online service.
- In the Data Management Settings, delete save data for the game.
- Uninstall the game from your console entirely. (Don't worry, your worlds will be saved.)
- Re-download the game from the Nintendo eShop. Do not restore your cloud backup.
- Turn off "Automatic back up save data" by clicking + on game, then "Save data cloud" and click your user. (Turning this off won't cause your cloud-saved worlds to be lost.)
Once all these bugs/issues are fixed, you'll be able to restore your cloud data and play on your worlds again.