ZLUDA was funded by AMD for several years. Somewhat ironically, AMD's legal team went after them for releasing that code as open source and the developer rebuilt it from a pre-AMD funded version.

As to whether it's violating the EULA terms. Maybe, depends exactly what they did and how they did it. The better question is probably "and are those terms actually legally enforceable" which ratchets things up another level. Depending on their jurisdiction, how they did things, and what exactly Nvidia tried to go after it could be anything from illegal to gray to not. I'd lean towards the latter end of that spectrum, even if the EULA had some scare terms around it, but I'm also just some dude on the internet who hasn't even read the exact terms in the EULA or looked into if they'd be relevant to how ZLUDA was built/used.