Nintendo claims that Yuzu actively assisted in piracy of Tears of the Kingdom. They say that Yuzu violates Nintendo's copyright by decrypting their games to run.

They also claim that "Nintendo also has technological measures on the Nintendo Switch console itself, including additional layers of encryption, which prevent users from unlawfully accessing or modifying the console—including to procure the prod.keys—and from accessing or copying games stored on the console or on a cartridge inserted in the console." - From the actual lawsuit which you can read here: https://www.scribd.com/document/709016504/Nintendo-of-America-Inc-v-Tropic-Haze-LLC-1-24-Cv-00082-No-1-D-R-I-Feb-26-2024

Nintendo claims that Yuzu spoiled Tears of the Kingdom for everyone (not listed as a damage in the lawsuit this is just something they've added on).

This lawsuit bears similarities to the Bleem v. Sony though I'll let you draw your own conclusion if this is comparable.