Capcom has previously warned that it is possible that they will delete your save file should you go off their Resident Evil 7 Cloud for Switch service. This is largely because save files are saved within Capcom’s cloud. However, Capcom has come out to say that paying customers’ save files are not safe from any purge as well.
It would seem like Capcom can’t guarantee the robustness of their cloud systems. From their official site’s warning notice, Capcom said:
Save data of “BIOHAZARD 7 resident evil cloud version” is saved on the server side, and data retention cannot be guaranteed if the “validity period” of “voucher” ends. Also, even during the valid term of the “Usage Ticket”, we will not guarantee that your save data is stored without defects and that it will be read out.
While it would seem unlikely that any catastrophic data damage will occur with today’s cloud systems and level of redundancy, player should still play the game with their fingers crossed.