“A significant amount of users have been receiving 15-day suspensions as a warning shot from Xbox,” they add, including photos from users as proof. “We STRONGLY recommend removing any and all emulator apps from your console in retail mode immediately (dev mode is unaffected). We apologise to anyone who got a 15-day suspension, we know it sucks.”
I don’t think it’s about threatening with legal actions but more about keeping a good relationship with Nintendo. They probably just asked them to remove it from there retail side because they didn’t like it.
But you can still run emulators on the developers mode without problems, you only need to pay a fee to get access to the mode.