Except you are in the absolutely small minority of people who even hear about Nintendo doing shit like this, and 99.99% of their playerbase didn't hear about it because they don't read gaming related legal news. Plenty of people don't know about Pointcrow getting hit by a hammer by Nintendo for playing modded gamemodes that they made for instance. Lots of readers will don't even know that happened, or will go "point who?".
They gave him a way out, and he declined. In the case of Yuzu they maybe could have fought it, but this guy was also directly selling pirated switches. He's a bit more screwed.
If he was actually selling Switches loaded with pirated games after Nintendo sent a cease and desist he's an idiot. This was purely someone trying to make a buck off of people that can't figure out how to pirate a game themselves, and it just gives Nintendo more ammunition to use the legal system against the rest of us.
Yuzu screwed up by marketing itself as a superior way to play switch games, while advertising their patreon which could be interpreted as selling stolen property (not my opinion but it's what Nintendo's is)