Yeah, if you file a bug with Yuzu, or join their chat channels and request support, and there's any hint that you didn't use your own switch you'll be banned instantly. They really do have a 0 tolerance policy.
For good reason, this is an emulator for a current-gen system, and from what I've seen on Youtube, a lot of games are fully playable.
Companies are likely not that bothered by legacy systems being emulated, but this is the current Nintendo flagship console. Thankfully the Switch seems to be selling amazingly, which should mean Nintendo don't really care that much.
Another factor is that you will likely need a pretty beefy PC to play games in full speed, and compatible controllers.
Not to mention that a significant portion of the value prop of the switch is its unique hardware, and the ability to seamlessly transfer an in-progress game between your TV and handheld.
I used chiaki. It works with any controller connected to your phone or even a built in touch control system that probably would suck to use, though i did need it for the home button and did have to remap controls bound to the touch pad buttons. We were even able to play borderlands on local coop that way despite only owning one dualshock 4.
They're right to be paranoid. Nintendo is one of the few game companies that's extremely aggressive about protecting their IP (particularly when it comes to emulation and ROMs). They've forced a lot of sites to stop distributing ROMs of games for their consoles and I don't doubt they'd come down with a massive life-ending hammer if they caught whiff of piracy in the Switch emulation scene.
If you say that, then I don't think you've paid attention to what they did to ROM sites in recent years. No other company has been as aggressive as they've been on this front.
Most projects of this sort are fairly touchy about that kind of thing, because they're at the risk of being canned if it seems like they are promoting piracy.