There are many interesting points in this video for me but most saliently:
-Nintendo is not as litigious as it could be given how many possible infringements it could potentially persue
-It is well aware that it loses fan goodwill whenever it shuts down some innocent fangame, but the way that patent and copyright law is written it is apperently a significant risk diluting their brand if they don't take actions to protect it, so it is a balancing act they have to calculate
-Sony's backing of Palworld is the particularly alarming part for Nintendo that is likely spurring them into action in this case
This isn't a defense of Nintendo, but I think it's interesting to see some deeper systematic reasons for why they do what they do