zdate/DSTswitch_contloctime = on is the default setting since kernel 6.40, so we expect that many systems just run in this mode during DST switch without being stopped. We are not aware of any issues up to now. Of course we have performed sucessful tests as far as the basis system itself is concerned.
As note 7417 points out, however, it is not guaranteed that all other applications won't have a problem with the continuous local time, especially if one considers 3rd party software, external systems etc. which interact with the server during the DST switch.