It does actually.
Nintendo’s lawyers argued in a letter to Valve that Dolphin operates by incorporating Nintendo’s “proprietary cryptographic keys” by decrypting the ROMs of GameCube and Wii software, thereby violating the DMCA. Nintendo is referring to the Wii Common Key, a decryption key built into Wii hardware that was extracted more than a decade ago by a separate group — known as Team Twiizers — and incorporated into Dolphin’s code.
The team behind Dolphin argued in their blog post about the emulator’s Steam release that “only an incredibly tiny portion of our code is actually related to circumvention,” and that using the Wii Common Key does not apply to GameCube games.