So, I agree with your general points, but I think part of the reason Nintendo is so harsh towards Yuzu is because, as far as I'm aware, Yuzu does actually contain proprietary code from Nintendo.
My understanding is that the Yuzu team used a Switch development kit instead of reverse engineering the Switch as they had claimed, so the entire code is essentially tainted because it's unclear which parts came from the development kit and which parts came from true reverse engineering