First I'm not sure what I did wrong here, but after installing my first few switches I noticed this in the settings. 1 out of 6 switches is showing S2 and the rest show none. Is this a big deal? Should I change something? I read a few posts about this but most were a couple years old and I want to be sure the information is still the same, but some people seemed to think it shouldn't matter for light switches.
If the switches are working as you need/expect, and you don't need/want security, it is not a big deal to have them paired as "none" (some prefer this as there is a little less overhead without security).
If you want security on them, you will need to pair them again and enable the security.
There are a variety of reasons why a S2 device will pair without security, including the operator unselecting security check boxes during pairing, and issues with the communication during pairing, which can result in the controller (hub) falling back to no security.
Nothing about S2 on Hubitat should be two years old; the current model of hub, C-7, was released last summer and is the first to support S2. (All models of hubs have supported S0, which I would still recommend avoiding unless necessary--like a door lock that doesn't support S2.)
Anyway, this is really up to you. Some people prefer not to include devices with security that don't "need" it (which again would include things like locks, garage doors, and whatnot). Some people prefer to keep all devices or as many as possible with security. From a practical standpoint, the security level of your Inovellis will not matter unless you plan to use Z-Wave Association, and then it needs to have at least one "level" (grant) in common with the associated device. Otherwise, there is no technical reason--just your preference.
No security or S2 either are ok for performance you definitely don't want many devices connected to S0 if it can be helped. Most people would say a secure connection is really only needed for locks or garage door openers where you definitely don't want someone being able to control those easily. If you think you may want to update firmware at some point on those switches no security is probably better at the moment for simplicity.
Ok thanks everybody! If I do decide to repair them, will it break the rules I've created?
No, not if you follow the advice to remove or swap out the "old" device in all apps (including rules), then swap the new one back in when you're done re-pairing.
But because I assume you're asking whether the new pairing will create a separate device on the hub (not automatically re-associate itself with the old one--which would avoid the need to do the above) or whether RM might get mad if you exclude/delete a device without removing it from the rule first, then that answer is a "yes."