This is exactly right. Having worked in these environments before (and currently), no one wants to stick their neck out if their head is just more likely to be chopped off. As a result, only the projects that are least objectionable to a committee of decision makers (so formed to reduce risk) move forward.

Well, I would say this is not the only reason (though it is part of it), company has to also develop an internal culture where people can be creative. I am currently working in a company (general software dev, not gaming industry), which retain employees for long term, but they haven't developed a culture of creativity, so most people don't bother going out of the way.

One of a very famous example of company culture these days (from anecdotal reports) is Google, apparently you are rewarded for making new stuff, but not for improving / fixing / maintaining existing one, which is why they keep making new stuff and abandoning older one.

Is this supposed to make people feel better about Nintendo suing emulator developers for big dollars, crushing YouTubers for showing gameplay, absolutely hating and shutting down tournaments run by the little guy, somehow make every game port to a newer console worse, etc

That’s a good quality for them to have.