Another reminder of the age-old lesson: If you're working on a fan project that involves another company/person's IP, keep it a secret until you're ready to release it. So many cool fan projects get shut down because they get impatient and show off their work so early that they get C&D'd before they ever get a chance to come close to finishing their project.
Maybe you do. Maybe you don't. It's hard to tell, since so few developers ever actually release their fan projects in the first place, so there's not a lot of noteworthy cases to draw precedent from.
But at the very least, you'll end up with a finished product under your belt. You'll have experienced the entire process of designing, developing, and releasing a video game. That's legitimate experience that you can put on your resume, even if you are sued for it. But an incomplete project that got shutdown before ever seeing the light of day is worthless to a developer who may want to pursue a future in software.
Naturally, there is disappointment in the comments on Lambert's Patreon post, and some users suggested Lambert might be able to move ahead with the project if he switched from Libultra, the official Nintendo 64 SDK, to libdragon, an open source SDK. Lambert said he's not sure if doing so would appease Valve, and he's reluctant to dive into it without first getting a green light from Valve.
"I would consider porting to libdragon if Valve agreed to allowing me to finish before trying to make the jump," he wrote. "It would be a lot of work and I wouldn't want to commit to it before knowing if it would actually pay off." He doesn't seem to think that's very likely to happen, though: "They also don't seem too interested in the project as I can't meaningfully distribute it on Steam."
So a company is getting worked up because someone who isnt working for them is using tools from another company that sues over not bowing hard enough to make a fan-made version of the first company's game in second company's system.
In other words "greedy capitalists capitalist all over the place, cool fan game caught in crossfire"
Inb4 fanboys trip over themselves to tell me I'm wrong.