Ok, and...?
Valve doesn't care if you're infringing another company's copyright (i.e. they're not held liable) and they're not your legal help either. The developer / publisher is liable for that. All Valve has to do is to respect dmca requests.
There are many "legally distinc" clones of games on Steam. Hell, Palworld exists and they didn't have a problem getting to the store front.
For Dolphin the problem was a gray area of how it circumvents Wii's drm.
Wait until you hear about kernel level anticheat for competitive games