The way its supposed to work is that let's say you have a party of 5 with one child not tall enough to ride. We will call them Mom, Dad, Brother, Sister, & Baby.
Without Lightning Lane
Entire family approaches the entrance and asks about rider switch. Mom will wait with Baby. Mom can take 1 other person with her for a total of 2 on the rider switch. It's decided that Brother will get to ride twice. The CM scans Mom's ticket and Brother's ticket to issue the ride switch. The time to come back is based on the current standby wait and will not be active until Dad, Brother, and Sister get through the Standby line. They enter the standby line, ride, and exit. Mom and Brother can now enter the LL so that Mom doesn't have to wait that entire time over again to ride.
With Lightning Lane (Genie+, DAS, or Downtime Recovery)
The same scenario as above but everyone else has access to the Lightning Lane. The CM will only issue a rider switch to Brother as he will redeem his LL and not have it for the 2nd go around. Mom won't get a rider switch because she had her LL to use. The wait time for Brother will be reduced to match the wait in the LL.
Other Scenarios
If the tickets provided are not scanned into the park, it will produce and error for the CM and they would not issue.
The rider switch will be valid well after the waiting period, however if they try to go to another Attraction to collect another rider switch it will say they already have one and they would have to choose to keep it or overwrite it.
If part of the party has access to the LL and the others do not, the ones that do not will be asked to wait in the standby line. So if Mom and Sister have a Genie+ and they wanted to try to cheat the system. Dad and Brother will be asked to wait in the standby line and Mom will ride with Sister using their LL after they swap. No rider switch would be issued. If the family is insistent that Brother rides with Mom, they would have Brother use sisters LL or have Sister still wait in the SB with Dad and Brother, with the rider switch issued to Brother.
If Mom wants to ride with both Brother and Sister a rider switch can be provided to one of them, but Mom would have to join standby with the other. Rider switch is only good for 2 people.
People using rider switch don't necessarily have to be attractions with height requirements or will small children. A parent may request a rider switch at a no height requirement Attraction if their child is sleeping, fearful of riding, or has special needs. If the person is a capable of being on their own in the park and doesn't have special needs, i.e. an average adult, a rider switch would not be issues to a family of 5 adults. This is because the adult choosing not to ride is by choice and does not need supervision.