This is something Nintendo just didn't need to interfere with. If they chose to ignore Big House's Melee tournament, then there would be a lot less trouble and Nintendo would have a way better reputation for letting a big and sponsored tournament use a fanmade online service.
Yes, Slippi has a Patreon. You can play 100, 1,000, 10,000 hours of Slippi and don't have to pay a cent. This is an optional thing. What's more, Sega is totally fine with this kind of thing. There's no written law saying "Nintendo must take down everything with a Patreon." What's more, did I mention Nintendo is the richest company in Japan? Slippi wouldn't do anything to harm them. It's not IP protection either, all Slippi is is online mode for a 19 year old game.
I don't care what anyone says. Nintendo's just trying to kill this game. I may not play it, but I send my condolences to Melee fans, and luck that their community continues to thrive.