Note that emulators for all(?) other Nintendo consoles remain available, and were available while the consoles were relevant. There is little Nintendo can do as long as the authors actively steer clear of guiding/condoning piracy or guiding/condoning certain types of DRM-bypass.
It was to my knowledge Yuzu's stance on this particular matter that cost them the project, with Nintendo lawyers striking once they saw the hole in the homebrew armor.
Legally, there's actually quite a bit Nintendo can do, there's just always the risk of setting an undesirable precedent due to how few cases there are.
Yuzu's actions just elevated the likelihood of success to near 100% instead of 80-90%.
It was to my knowledge Yuzu's stance on this particular matter that cost them the project, with Nintendo lawyers striking once they saw the hole in the homebrew armor.