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After shutting down several popular emulators, Nintendo admits emulation is legal
(www.androidauthority.com)
this post was submitted on 16 Jan 2025
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Right, emulators aren't illegal but a bunch of adjacent things can be - for example system BIOS/FW/encryption keys/ROMs if you don't dump them yourself from your own personal hardware.
What got Yuzu in the crosshairs was announcing support for Tears of the Kingdom before it released, meaning they were testing their emulator on an unreleased game and the odds that every dev and tester had legitimately gotten a copy of the game before official release is so low that they weren't about to fight it and go through discovery (which might have identified significant additional piracy on their part). It was easier to fold and settle, and probably saved them from an immense amount of fines for piracy used for testing.
I remember that Valve also caused trouble there. https://youtu.be/aRnZrSBK3R4 Since you saw the Yuzu surface briefly.