I know, Nintendo will litigate anyone for any reason, but it is possible for a company to look away when these measures are taken.
Companies don't have to C&D. If something poses very little financial danger, but taking it down presents significant risk of PR harm, it's not worth it. The C&D would cost more than it would save, so it makes no business sense.
Don't ask me why they even bothered taking down fan games, though. They seem to care a lot about art assets in particular.
If talking about AM2R, it posed a rather credible threat against the success of the official Metroid 2 remake (ignoring the fact that AM2R is of much higher quality anyway). Plus it contained ripped sprites from Zero Mission, Fusion, and incorporated all of the characters and enemies that Nintendo owns.
You can't just make your own Lord of the Rings or Star Wars without infringing the copyright of the original work. Same with fan remakes.
But distributing the code is not part of the reverse engineering process, so that fair use doesn't apply. Also from that article:
> It is highly risky to copy any code into a program you create as a result of reverse engineering, because that copy could infringe copyright unless it is a fair use under copyright law.
EFF on the topic https://www.eff.org/issues/coders/reverse-engineering-faq