This settlement will probably not ruin people's lives, because no person has been sued. It'll ruin their liability-limited company, who had been profiting financially off all of this, but if the liability limit works as intended, then the actual Yuzu developers are shielded from the effects of this lawsuit.
And the reason why I consider the TotK leak problematic is because the moderators were joking about all the new patreon subscribers caused by it. And that means they were, at that time, fully aware that they are enabling large-scale piracy. And their company was making money off it.
The estimate discussed in the discord was 40k leak players, which at $60 each would be 2.4 mio in lost sales. By coincidence, that also matches the settlement amount that Nintendo asked for ;)