Emulation and emulators aren’t illegal. Yuzu for example got in trouble mostly for distributing tools for circumventing copy protection and dumping roms and not for the emulator itself.
But it doesn’t really matter as nobody has money to defend themselves against something like Nintendo. Here just even the threat of it was enough to get the Ryujinx devs to fold just in case.
It is, machine learning, neural networks and all the other parts in LLMs and generative algorithms like midjourney etc are all fields of artificial intelligence. The AI Effect just means the goalposts for what people think of as “proper” AI are constantly moving.