I guess it's a matter of whether you own your hardware (and included software) or just own the hardware and a license to use the software that comes with it in a certain way.
Nintendo can’t be completely incompetent here; if they get Yuzu shut down someone will inevitably fork it, and they have to know this.
Presumably this is a play to try and establish precedent. They know that this lawsuit means nothing in itself, even if they win, but it can then be used to go after Retroarch or Higan or Mupen64 or Dolphin. This is bad.
I hope I dont have to get a new phone anytime soon.
edit: I believe it's called HbbTV