Emulation

Ok, first off, installing custom firmware on a switch involves a lot more than entering rcm, that's one step yes, but not the entire process. 'soft-modding' a release switch, uses a hardware exploit on tegra SOCs that allows the device to bypass (the encrypted) bootloader on the switch by way of injecting a custom payload in recovery (not debug) mode.

This isn't even an argument so I don't know you are saying this, it's settled in criminal and civil court, Doug Bowser went to jail for this exactly, specifically, conspiracy to circumvent, and trafficking circumvention tools.

Otherwise you should actually read the DMCA, I can't find any mention of format shifting broadly and exemptions provided are very specific.

I should add, it doesn't actually matter how good an attempt of DRM is for it to be illegal. The fact that Nintendo made a mistake in allowing the ability (through unintended use of the hardware) to enter rcm, does not magically make it legal. the DRM just needs to be a clear effort and intention.

I'm not saying I agree with it, but it's the reality of the world we live in.

Edit: can you actually provide any info on where you are getting that it's legal to crack blu ray encryption?