I really doubt that they are that stupid.

I wasn't referring to the Yuzu core team.

all the ppl that were directly associated with the group are no longer legally allowed (or at least would risk a lawsuit against them) to contribute. So a lot of expertise got lost.

Sure, the core "Yuzu" team. That doesn't include any of the external contributors. There's very often a larger contributor base outside of a core team in FOSS projects.

And yes, there's expertise that was lost. But that doesn't mean no one else knows how to do the work. It will march onwards.