There's no "circumvention mesure" in there, the emulator can only read unencrypted games by default. You won't find anything in the source code, if the game is encrypted, it cannot read it.
Here's the code that breaks the DRM.
https://github.com/Fabi/yuzu-mirror-mirror/blob/master/src/c...
Also I may mention that the support of external keys is there for you to get games for your own switch, pirates can just share decrypted games anyways.
Nintendo didn't want to get in court and also had to basically lie in a DMCA, I think that tells it all on their legal standpoint, they were afraid of creating a precedent.
Don't worry that if they were so sure to win, they would be in court already like they did with the R4 cartridge.