Hi, sorry this is so late, but I've just found these forums! :^)
I'm guessing the reason your switchplates are cracking is because you're using Sculpey. It might be that, even though Sculpey III is supposed to be more durable than the earlier versions, it is still too brittle for your purposes.
Fimo is a polymer clay that's more flexible when it's baked, as is Premo and some of the newer brands.
Also, it might help if you, after you make the holes, you actually insert the screws and then remove them before you bake. This "prefitting" would create more space for the screw to be tightened when you affix the switchplate. It's the screw having to screw into an extra layer (the polymer clay) in addition to the plate and the screw hole in the outlet that's causing the cracking. A more flexible clay would have more "give" to it.
I agree that you probably want to leave the baked clay on the switchplate. I'm going to guess that the actual suggestion was to remove the baked clay and then use a glue (usually Sobol) to affix the baked clay permanently to the switchplate. It's a better bond than relying on the clay to sticking by itself to the metal.
And by the way, you can also use plastic covers, if you test them first in your oven to see if they can take the heat. (I found the ones I bought were fine.) It might also prevent the expansion and contration that will inevitably occur with a metal plate.
hth,
Luann