Well, if only there was a way for Nintendo to deal with this kind of issue, right? Like for example, I think it's clear that the experience of running older Nintendo games on emulators was better than bothering with the real thing or re-releases on services like virtual console because you could use features like online multiplayer, rewind/save states, and emulator enhancements.
But of course, Nintendo did kind of start to figure this out; they actually started implementing similar value-adds like multiplayer and save states into their own emulation suites for retro consoles. I think this is good, since you're essentially asking people to buy the same thing again (maybe thrice or more if you're a die hard Nintendo fan who has followed the console lineage since they started doing re-releases like this, back on the Wii and 3DS.); you may as well provide some value-adds.
But, maybe they can't do anything about modding, because nobody has figured that out? Well... except for Valve, who has apparently figured that out. And maybe even SEGA arguably, who also has figured that out, too, considering they have third-party ROM hacks on Steam Workshop.
¯\_(ツ)_/¯
Of course, I think Nintendo's heritage, history, etc. makes it clear that it would be unlikely for them, any time soon, to take pages out of anyone else's book. Obviously, Valve is just a very different company, and PC gaming is a very different market. I think, though, that a lot of people believe it would be damaging to Nintendo's brand and lose them money if they were more open and fostered this sort of thing, but I think it's hyperbole, I don't see it. In all likelihood, if Nintendo keeps making great video games, people will probably keep buying them, even begrudgingly, just like many people do today, regardless of whether they're dicks to people or they're not.
Stubbornness can be good sometimes, but it definitely leads people and entities to pick fights that are pretty much unwinnable. Eventually, they're going to have to find the line.
(P.S.: I do actually agree though that there is truth, 100%, to the idea that piracy could substantially hurt sales; I think Nintendo is the only company to have experienced tangible evidence of this, with the Nintendo DS and readily available R4 flash cartridge. THAT SAID: If you don't buy a Nintendo Switch and Nintendo Switch cartridges, you can't play online; the console and cartridges/downloaded games have unique IDs online, AFAIK. I think that this is probably effective anti-piracy. Sure, people COULD pirate a single player game from Nintendo, but getting a Steam Deck instead of a Switch seems unlikely; If you're a Nintendo fan, you are not going to get as much value out of running a Steam Deck with emulators. I posit that the majority of people will wind up buying the game, but some of them may also play around with emulation, too. If people really just didn't want to pay for Zelda, a TON of Switch consoles that have the hardware exploit can use the RCM exploit and probably run pirated copies on the real thing with third party modified firmware. The truth is, if backlash from these videos isn't enough to harm their sales, and clearly it isn't, then I suspect the reach of these creators just isn't enough to matter in the first place.)