Pinching toddler: Sleep rituals

My toddler of 2 years has developed the unwanted habit of pinching the skin of myself and the father while co-sleeping. He falls asleep fine on his own in his crib in his room, but wakes up yelling during the night and then one parent almost always co-sleep.

I want to stop this habit so badly because it's almost like torture.

We haven't been consistent - our toddler also seeks out skin contact during the day when he feels overwhelmed or needs support.

What do I do?

Stop the toddler cold turkey both day and night? I'm afraid he will redirect to self-harm if we go cold turkey..

Stop and redirect to some tactile toy?

As far as I know he doesn't pinch other children.

Please, I'm really looking for any type of advice to stop this behavior.