An attempt at an answer
Tosfos is commenting on what Abaye says, so one must look at what he says.
Note- it may be a bit more complex than this. like tosfos may be commenting on rashi, and tosfos and rashi may differ. With tosfos taking Abaye's position and Rashi taking Levi's position(as fred might suggest). But i'm answering based on what I have translations of.
Here is a quote from the gemara of 46B, from Abaye.
Below they are talking about Israel. The Esrog is permitted to be eaten on the 8th day.
Said R. Papa to Abaye, What, according to R. Johanan, is the essential
difference between the Sukkah and the ethrog?24 — The other answered
him, The Sukkah which is fit to be used at twilight [after the seventh
day], for were he perchance to have a meal at that time he would be
expected to sit therein and eat there, is set aside for its ritual
purpose during the twilight, and since it is set aside during
twilight, it is also set aside for the whole of the eighth day; the
ethrog, however, which is not suitable during twilight,25 is not set
aside for its ritual purpose during twilight, hence it is not set
aside for the purpose for the whole of the eighth day.
Below Abaye is talking about the Diaspora
And as for us, who42 keep two days [of the Festival] how are we to
proceed?43 — Abaye replied, On the eighth day which may be the
seventh,it44 is forbidden;45 on the ninth day which may be the eighth,
it is permitted.
By understanding what Abaye is saying, we can make sense of the Tosfos provided by Seth.
The only reason why, in Israel, the Sukkah is forbidden to be used as fuel on the 8th day, is because it is used at twilight which is into the beginning of the 8th day, and gets set aside for the whole of the 8th day. Whereas the Esrog is not being ritually used at the beginning of the 8th day, and therefore is not set aside for the whole of the 8th day.
In the diaspora, the 8th may be the 7th, and so the esrog is ritually used on the 7th and thus set aside for the whole of the 7th. So on the 8th that may be the 7th, you don't want to be eating the esrog. (One could say, but the Esrog isn't ritually used on the 8th, so why should it be set aside on the 8th. I suppose it's still set aside on the 8th, as one can set it aside without offending/detracting from Shmini Atzeret, and thus one still can't eat it on the 8th - that would offend/detract from the sfak Succot).
So when Tosfos says "on account of the succah" it means sitting in the succah at twilight.
The Tosfos still doesn't entirely make sense, because Abaye explains perfectly well that he decrees that we can eat the esrog on the 8th day in Israel, and we can't eat the esrog on the 8th day in the diaspora, and it's nothing to do with sitting in the succah at twilight.
Abaye only brings up about sitting in the succah at twilight, to show why in Israel on the 8th day it's forbidden to use the succah as fuel, even though it's permitted to eat the esrog. It's strange that Tosfos makes a connection.
The Tosfos is only explaining Abaye's ruling, and somebody commented that the Ritva has a different Girsa that rejected this Tosfos.
One answer suggested that "on account of sukkah" meant that if we eat the esrog we may accidentally eat a succah decoration, but that is very speculative, and reading a lot in.
Since this Tosfos is just trying to explain Abaye's position, and Abaye's position is I'd say "on account of sukkah" means what Abaye was talking about - sitting in the sukkah at twilight. There are some potentially useful comments on that answer though.