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iirc it was yuzu who linked tools to do it, but the application itself didnt do it. Yuzus main problem was often linking to resources and advertising stuff, and partially locking it behind a paywall.
No, yuzu’s main problem was being a for-profit company. That seemed to be central to Nintendo’s case against them. The company behind yuzu was making millions.
Paid emulators have existed for ages and have won in US courts before.
The paywall as far as I know isn’t that much of problem. Cemu has/had a paywall for years. Several other, though less successful, emulators have had paywalled content/early access as well. The BLEEM emulator that was brought to court was a paid commercial product. So that currently is perfectly legal within the jurisdiction of those cases. Nintendo’s case against Yuzu was about piracy/DRM circumvention. That wasn’t brought to court, so we don’t know the outcome however.
They allegedly also advertised that newegames, like TotK was running better on the EA builds and there’s the suspicion that the yuzu team also distributed the keys via torrents. All of these are just allegations, though.