That sounds much worse for projects like this unless the authors go fully anonymous and always practice clean opsec.

Nintendo probably sent them a deal along the lines of "Agree to take down the project or else we will sue you for millions of dollars". Could you imagine if you were served that and had to respond "it is impossible for me to take down the project because of the hosting I used."

Even if it's a trial Ryujinx could win... Winning and trial isn't free, and you can often can't recoup attorney fees.

How does it deal with material that lands people in the jail?

Okay and I'm not sure maintainers want that