It may have also been the fact that they linked to instruction on how to rip prod.keys and system firmwares. Also their instructions on enabling running copyrighted ROMs - despite the fact that Ripping game ROMs and firmware is not (unfortunately arguably, due to licencing models and jurisdiction - you will own nothing and like it.) illegal so long as it's for personal use.

They should've advertised it primarily as a testing and homebrew platform, and made sure not to make too much mention of the fact it can be used to play backups. Then they can at least play the ignorance card with more confidence.

Even then though, multi-billion yen company Nintendo probably would still pull this shit and drag, drag, drag the lawsuit out for forever and a day- draining lawyers fees of money. That being the case, settling is unfortunately the only option.