How the makers of the "Suyu" Switch emulator plan to avoid getting sued

Avoiding making money on this is just a total red herring, it has zero bearing on copyright law in general or the DMCA. Though if you're careful, not accepting money has the useful side effect of making you much more difficult to identify.

Ideally you would consult with the Yuzu guys and learn why they quickly decided to settle. The encryption keys are perhaps the most plausible explanation.

This seems more in line with what I've traditionally seen emulator makers do. Extreme care to insist the program is for homebrew only, with little to no guidance on obtaining ROMs. This legal grey area has existed for a long time. I can see why Nintendo would get annoyed by people trying to profit off of this.