TBH I see this more as Valve seeing that with a project this publicly known, if they don’t defend their IP here they’ll lose any future copyright claims and want to prevent it.

That would only apply to trademarks. Copyright has no requirement to sue to maintain the rights, but registered trademarks do.

I wonder if there was some sort of settlement between Valve and Nintendo, after Dolphin was removed from the Steam store, which requires them to support Nintendo. Even then, this is separate to the Steam store.

It does give them brownie points with Nintendo though, I guess.