Nintendo, while aggressively litigious, do so to maintain the value and exclusivity of their IP.
Their games also never go on sale, and all sell really well over time, unlike many releases from other publishers.
The result is that Nintendo are able to release a solid cadence of high quality, first party games free of other forms of aggressive monetisation, maintaining the value of the games as art.
The emulator in question was profiting off of using their proprietary encryption key.
You notice how they haven’t gone after Dolphin?
They’ve threatened Dolphin, but they know going after Dolphin won’t be as easy as Yuzu. That’s why they handed the guy who made Ryujinx a bag of money and asked him to shut down, because it would be a lot of trouble, like Dolphin.