Whether that's allowed by exception clauses for interoperability, whether that's allowed by some kind of fair use clause, whether Nintendo's broken DRM actually counts as an effective copyright protection measure, etc. -> only a lawsuit could decide that. Your guess is probably as good or as bad as anyone else's.
EOT
Short FAQs 14h later to answer a few things:
- What do you know about any of this in the first place?
→ I've been involved with Dolphin for 10+ years as a {core developer, infra maintainer, foundation board member}. More recently (since Mar 2022) I did the administrative work to onboard Dolphin on Steam. Funnily enough the notification Valve sent to the Foundation was still addressed to me personally even though I've stepped down recently :)