this post was submitted on 14 Jan 2024
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In short: they can't. I mean, Nintendo could try, but it would definitely be thrown out. Valve was never directly involved in this project in any way, at least not until stepping in to shut it down. They were just concerned about their IP being in any way connected to anything unauthorized Nintendo.
Even if it would get thrown out, they would still have to allocate resources to fight back, which is time and money they would rather spend on something else. I understand why they just don't want to have to deal with a potential lawsuit that may or may not come.