A PPS ratio of 1 (or 100%) corresponds to the expected earnings of a Litecoin solo miner in an ideal world, without taking into account aspects such as orphaned blocks. (In practice, a Litecoin solo miner will always achieve a slightly lower ratio in the long run.) We say “expected” earnings because mining is a stochastic (random) process, and it is therefore impossible to know beforehand exactly how much a miner will earn in a given lapse of time.
Thanks to merged mining, a technique that allows multiple cryptocurrencies to be mined simultaneously, it is possible to achieve PPS ratios higher than 100%. This is unrelated to what “profit-switching” pools do, as in merged mining all chains are mined at the same time. For this reason, merged mining does not cause sudden difficulty spikes and does not harm any of the involved networks.