Why are you being so obtuse? Yes, the repercussions for losing to Nintendo in court are life-ruining. I said that already.

However, continuing to let Nintendo DMCA legitimate emulation projects isn’t good in the long-term either and only stalls progress for the targeted projects.

The only way to “win” this fight is to win in court. I’m not saying that any dev should be compelled against their will to do so. It’s just the only way to actually make progress. This isn’t a technical problem; it’s a legal one.