Open source projects do not grow by themselves. It requires serious effort from dedicated developers to develop and maintain applications as complicated as an emulator. Yuzu's developers are banned from doing so and I don't see how this incident could help bringing more developers.
I'm sure there will be developers capable enough to keep it working on new operating systems. Games that worked with it until now will keep on working, and that's what matters to most people anyways. No need for major changes to the codebase.
I don't think it's diminishing the work of the Yuzu devs, but more so a strong belief in the capabilities of the open source community. They worked their asses off and are extremely talented, and I'm sure there are others who will hop in and carry the torch.
I'm also curious if there's a programmatic way to circumvent the argument Nintendo made about bypassing DMCA by separating the emulator from the code that utilizes the keys such that you can use tool A to bypass DMCA, and tool B (Yuzu with game decryption removed) to run the circumvented game. In this case tool A already exists, and tool B could be a fork of Yuzu.
This is similar to how Tachiyomi forks can still exist. Even though tachiyomi never had a real case go to court, they've separated the extensions library from the reader so nothing comes "preloaded" with any potential copywrite infringing parts.
A permanent injunction is entered against Defendant enjoining it and its members,
agents, servants, employees, independent contractors, successors, assigns, and all those acting in
privity or under its control from:
a. Offering to the public, providing, marketing, advertising, promoting,
selling, testing, hosting, cloning, distributing, or otherwise trafficking in Yuzu or any
source code or features of Yuzu
IANAL but that sounds like the court is banning those developers from working on Yuzu. I mean, you can still try to work on project that is 90% Yuzu but with another name but I feel like your lawyer would advise against that.
Okay then what? Unless the devs try real hard to stay hidden, Nintendo's lawyers will do a little bit of digging, they will find out who those pseudonyms are, and sue again. And this time the devs will be extremely lucky if they can get away with just paying out 2.4m because the law generally does not appreciate it very much when you try to ignore and avoid its previous rulings. A console emulator is absolutely not worth the potentially devastating legal consequences.