We are not fearful of retribution from Nintendo for various reasons, the primary being that if we worry about what could happen everyday we'd never get anything done. Another is that precident is in our favor, while Nintendo certainly could C&D us, the likelihood of that actually happening is next to zero. Also, since we're not distributing any of their assets we're not breaking any laws, so from a fair-use standpoint we're in the clear. Finally, I see mention of "Clean Room" reverse engineering, while we're not using the traditional methods (one team analyzing, another reimplementing), we're reducing Nintendo's legal footprint as much as possible by only recreating as close to 1:1 the subystems that would not behave properly otherwise.
In conclusion, while Nintendo certainly could C&D us, we're not going to let that rule our lives, but we're also not going to give Nintendo any ammo to come after us (we're not asking for donations, nor are we asking for monetary compensation).
Our source code will always be public for audits.