Do you not see the references to decryption and decryption keys? This code is explicitly written to break the DRM of switch carts. If you mean by default you mean they don't provide a key, that doesn't matter in regards to it being considered corcumvention.
No that matters. As is, the emulator cannot be used to circumvent nor break any protection. Feel free to try it yourself, boot up the emulator, give it an encrypted game and see what it does.
Nintendo didn't want to get in court and also had to basically lie in a DMCA, I think that tells it all on their legal standpoint, they were afraid of creating a precedent.
Don't worry that if they were so sure to win, they would be in court already like they did with the R4 cartridge.
