Agreed, the reporting on this has been so poor. The wording of the rules and how we know Apple has enforced past similar rules makes it pretty likely to me this

Agreed, the reporting on this has been so poor. The wording of the rules and how we know Apple has enforced past similar rules makes it pretty likely to me this is for apps similar to the n64/snes app on the Switch Nintendo gives to their online service subscribers - "official" emulators with pre-packaged licensed ROMs or integrated licensed ROM downloads, not generic emulators loading loose ROM files from wherever. Nintendo could even just offer iOS versions of those Switch apps (not that I expect this, but maybe??) under these rules.