The system is absolutely bullshit. If this makes it into a courtroom, the odds will likely be even further stacked against Yuzu. The chance of getting a judge that goes out of his/her way to understand the technical arguments is extremely low, and it's a lot easier to argue that unauthorized decryption is bypassing something than it is to argue that software needing to do it to work isn't primarily designed to do it.

Unless the EFF steps in and bankrolls Yuzu, the most realistic case here is that they settle out of court and Nintendo gets exactly what they want.