Tbh, YC is not a public taxpayer-funded institution: they are free to fund whomever they like, be it nephews, spouses, or relatives.

Of course, but they're liable to damage their reputation as a VC firm if they continue funding garbage without vetting it at all, just cause someone's techbro buddy asked nicely for YC's backing.

And we're free to call it for what it is: nepotism

Yes but a lot of YC's value derives from their reputation which is given to them by people like us.