The integration of optical data storage using fiber loops and ultra-fast optical switching via nonlinear optical loop mirrors (NOLMs) has long been recognized as an optimal approach for all-optical processing. This article presents a novel integration of these technologies to create an efficient buffering-switching device aimed at mitigating signal contention. Through thorough analysis, we explore the limitations of this integrated device in achieving error-free processing across multiple buffering cycles. Various factors, such as different types of noise leading to intensity fluctuations in buffered and demultiplexed signals, are assessed. Additionally, we delve into the switching characteristics of the NOLM demultiplexer to provide a comprehensive understanding of the device's performance.