To my understanding, the Patreon wasn't even the issue. Lots of emulators have Patreons. And even though it feels worse that it's an emulator for a system that's still currently on sale, that doesn't make it any less legal than an emulator for a console that's out of production.
The main issue, to my understanding, is that people were able to run TotK on Yuzu a week before launch. And you might say, okay but Yuzu didn't provide the ROMs, so it's not on them, but... how did they get the emulator patched and running TotK smoothly without the game? Seems like there was evidence they were basing their development on a leaked ROM of TotK, which is a big no-no