Nintendo isn't against emulation. They're against piracy, which Yuzu was facilitating. None of the emulators that don't have specific support for unreleased games have been touched so far.
Chozo
Good on them for acknowledging what was a pretty terrible response to player complaints. It's one thing to be firm in your balancing decisions, but it's another thing to demean your players over it.
That said, the responses from a lot of the players were also really over-the-top to begin with. Hopefully Arrowhead is able to remedy this combativeness between the studio and the community. A live service game really only does well when the developers are on the same wavelength as their players.
I wonder why they settled
I'd imagine because they charged for access to piracy-specific functions of the tool and knew they couldn't argue a case.
It was a dumb move for them to add functionality for unreleased games in the first place, and an even worse move to charge money for it. It makes it a lot harder to convince a court that your tool is for backup/archival purposes only, when you have features that could only work with pirated materials.
I feel like that trope doesn't really ring true these days, as most of the "general purpose" instances are pretty moderate. Back when Lemmy was still just a small handful of instances, that was definitely the case, but I think the wider adoption has balanced things out a bit closer toward center, overall.
I also recommend Pluto.TV for anybody who enjoys Plex's live TV. They've got a similar business model in place (watch for free with regularly-scheduled ads, like normal TV), and some different content sources (as well as some overlapping sources). Like Plex, it also doesn't require any account to watch. It also has an app for most TV platforms.
This only hides content locally for Threads users, it doesn't affect visibility from any other fedi platform. It's not that different from a Lemmy instance downvoting a comment to the point of being auto-hidden; it still exists but requires an extra click to see from your instance, and the rest of the fediverse can access it normally.