According to the article the conditions in the jail were just deplorable to the point of being torture which is also common in the US. So that’s also comparable.

Yea, it did. In most countries if you threaten to sue someone for something like this the judge would just laugh you out if the court room. What Nintendo did was threaten them with a lengthy legal battle they had no means to pay for and the options were to just shut down and declare bankruptcy or have Nintendo drain their funds and then declare bancruptcy. There was no other outcome because of how the US system of you can sue anyone for anything works.