And yet the project still is up.

Dolphin has a defense. There is a reverse engineering exemption to the DMCA that Dolphin is likely protected by. Dolphin's use of the keys might be entirely legal. If this went to court there's a reasonable chance Dolphin could win. It wouldn't be a clear-cut case at best.

The other thing protecting Dolphin is the fact Dolphin does not make money. They do not solicit donations publicly. Nintendo doesn't have easily citable patreon numbers to add to the damages, nor would Dolphin have the means to pay nintendo even if they won.

Taking Dolphin to court is a bad idea for nintendo. All risk, no reward. Keeps Dolphin safe unless one of those things changes, like putting it on steam.