Smashboards

Waiting until Nintendo decides they can get out of the corner.
For real though, if Nintendo threatened to shut down Project NX despite it being a completely personal passion project that one person was making and not intending to share, than I imagine someone making something like Slippi or M for Ultimate (or even Smash 4) would tick off the fabled IP protectors.

I wonder when they started to protect their IPs

When they became a company.

I can see why they shut down smash flash.

The big Smash 4 and Ultimate mods will come eventually. I think we won't see it until several years from now since Smash 4 and Ultimate are still relevant and their online services are still up. If Nintendo was so hard on telling mod creators of older games that they don't work on anymore to shut down their projects and give them a C&D, imagine how they would react to a modder's project which is on a current hot product of their's that they're still making money off of. I imagine if Ultimate got it's massive mod project now and added new characters while Sakurai is still making the DLC, Nintendo would not only give the mod creators a C&D but probably also file a lawsuit on them bringing them to court. Anyone who would dare to work on and release Ultimate's big mod project now would be cutting their own ***** off as the Nintenjas would literally come to their house to kidnap them instead of just giving them a warning and silencing them.

Goomboi they didn't shut down Smash Flash. It's still available to play as far as I know.