Why did Hitler honor Switzerland’s neutrality?
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Because there was no advantage for Germany to capture Switzerland.
It did not have a strategic geographical location for most of the war. The only time there could be a possible advantage was during the invasion of France as a way to pass south of the Maginot line but there was no advantage after that.
Belgium was neutral too but Germany invaded them, it was the route they selected around the Maginot line. Netherland was also naturally invaded as a part of the same offense to get to France and secure the coast.
It you look at neutral countries Germany invades there is a reason for them they do it. The main goal of the war for Germany was to get new territories in the east and to recapture what they had lost to Frane in WWI. The invasion of natural countries to the west is a way to achieve that goal.
Look at France where they create Vichy France in the south which was officially an independent state. Germany occupied the north and Atlantic coast of France, it was still officially a part of Vichy France but Germany controlled it because it was used in the continuing war against the British. It was only the part Germany lost in WWI that was annexed into Germany.
The future plans for the western states in the eye of Germany was different than the plans for the east
Switzerland was also not a military threat to Germany. There were also no strategically important resources or production facilities there that Germany did not get access to. Switzerland had solid arms, ammunition, and other stuff that was useful for Germany. They did reduce and finally, stop the export in 1944 but at that point, Germany did not have the military capacity to invade them.
You have to remember that invading and then controlling a county has a cost. You loo people and equipment during the invasion and then you need to station troops there to control it. If you just trade with them you do not need to do that and can still gain the benefits.
If you look at smaller countries Germany invades like Denmark and Norway the reason for Denmark is as a way to access Norway and do control the access to the Baltic. Norway was important both as a way to get iron ore from Sweden during the winter when the baltic sea was frozen. It also added a port for German naval units in the battle of the Atlantic.
Germany was afraid that Great Britain and France would invade and take control of Norway before them. That was not an unfounded fear. The Franco-British plan to intervene in the Winter war by transiting troops from Narvik in Norway over land through Sweden to Finland was in large part intended to control the ore production in northern Sweden and stop export to Germany. Both the Swedish and Norwegians recognized this and did not allow them to do this. The stilled planed to do this but the end of the Winter war and the German invasion of Norway stoped that.
Sweden was not invaded by Germany. In large part for the same reason as Switzerland. The allies could not take control of either Sweden or Switzerland without going through Germany or other axis countries.
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