Ignore the cease and desist orders IF you are releasing it for free, making $0 profit, then they cannot prove damages in court. It's not about who holds the copyright, it's about having evidence of damages.
Again, if damage cannot be proved, there is no case. Unless Nintendo of paying, or sucking the judge, ignore the cease and desist, call their bluff. The creator(s) could stand in the courtroom and demand to see evidence of real damages done, not estimates, or hyperbole, without needing a lawyer. I'm sure Nintendo's lawyers are thinking they will never need to step into a courtroom if they put up enough bluster.
If I am caught illegally downloading Band X's new album, that normally cost $9.99, I have done $9.99 in damage to that band.
If I stand on a street corner singing Band X's songs to strangers, without having a "homeless anything helps" style tip jar, I have re appropriated their music, and though I butchering their song with my flat awful signing voice, I have done no financial damage. If some douche films me signing on the street corner singing and posts to facebook live, there is still no financial damage. In fact a judge could find that in that scenario we are actually helping Band X by spreading their brand.
Perhaps the only REAL damage done is to Band X and Nintendo, is creating negative publicity for themselves and their brand by sending out lawyers against their fan(s) and it being published.