Nintendo have had a conflicted stance about community projects over the years. From threatening UltraHLE (early Nintendo 64 emulator) developers back in the late 90s to largely ignoring the Wii exploits and homebrew scene in the mid-to-late 2000s to attempting to hire private investigators to identify and implicate 3DS homebrew developers in 'illegal' activities.

A similar case is when the PS3 Slim was released without OtherOS support and later removed from existing consoles with a firmware-update that really incited research and development into the PS3 console security, which led to a full break around late 2010 and Sony attempting to retaliate with smear-campaign and prosecution(s) for copyright infringement across the USA and Europe. Some of those were more successful than others.

There have been public emulators for recent consoles from Nintendo and Sony and they've managed to stay up without any cease-and-desist or lawsuits so one would imagine they are doing something correctly to protect themselves (such as not being associated with piracy and some of the shady monetisation involved with that).