The $Lambda N$ and $Sigma N$ interactions are considered at next-to-leading order in SU(3) chiral effective field theory. Different options for the low-energy constants that determine the strength of the contact interactions are explored. Two variants are analysed in detail which yield equivalent results for $Lambda N$ and $Sigma N$ scattering observables but differ in the strength of the $Lambda N to Sigma N$ transition potential. The influence of this difference on predictions for light hypernuclei and on the properties of the $Lambda$ and $Sigma$ hyperons in nuclear matter is investigated and discussed. The effect of the variation in the potential strength of the $Lambda N$-$Sigma N$ coupling (also called $Lambda -Sigma$ conversion) is found to be moderate for the considered $^3_Lambda rm H$ and $^4_Lambda rm He$ hypernuclei but sizable in case of the matter properties. Further, the size of three-body forces and their relation to different approaches to hypernuclear interactions is discussed.
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