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Didn't they also rule against AI artwork? Seems that where their pocket book and legal worries are concerned, Valve treads lightly. Moral concerns and societal obligations? Not so much.
They also told a dev to stop developing a game since if they gave the go ahead Nintendo could potentially go after them.
They care about money more than anything else, just like any other corporation.
Are you talking about the dolphin emulator per chance?
Portal 64, they used the non open source code/tools, so Nintendo does have a bit of a case, hence why they are hesitant to give permission after the dev asked them.
One of those if they never asked, probably wouldn’t be an issue since valve never “knew of it”.