Don't know how good a case Nintendo has here unless it can prove that Yuzu itself contains proprietary code that allows the ROMs to be played. If the decryption is being done on the ROMs' end, then that's just another reason to go after the ones dumping and distributing the ROMs. Nintendo couldn't even substantially stop Dolphin, and Dolphin actually had a decryption key straight from Wii firmware in it. Good luck to them, but they're likely going for the wrong legal target. Taking down what ROM sites they can (which would legally be a lot easier than the emulator makers) is just getting rid of drops in the ocean of the ROMs' spread, but they're the target Nintendo should be going after.
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I sincerely hope that Yuzu developers don't end up like Gary Bowser and have their income garnished for life by Nintendo.
They might have a case if yuzu is actually decrypting switch software. That would be stupid of the developers, though. I would assume that they require you to provide decrypted games.
That's basically the only leg nintendo has to stand on here, but nintendo can out lawyer you into the poor house regardless.