Why does Nintendo hate fan copycats quite so much?

Why does Nintendo Hate Fan Copycats quite so much?
Nintendo will take down your console if you make copycats!
‘….anyone who hacks or modifies their console or games, runs emulators, or engages in piracy, risk having their console made unusable’.
One fan tried to connect all Pokémon regions in one MMO-style game. It was shut down before it could gain traction.
Fans are loyal customers right? So why the big deal?
Well these fans are using Nintendo intellectual property (like copyrighted characters and music) and if Nintendo allow fans to get away with it, they risk losing the rights over their IP.
Still feels a bit mean?
Brand value and reputation are core to Nintendo and any potential threats need to be minimised in case of damage to these assets. The risk is that customers believe these copycats are genuine and / or they become popular and commercially valuable.
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