Nintendo didn't hold a gun to anyone's head, developers could choose to leave and develop elsewhere. And many did with PC Engine and MegaDrive getting support from companies like Namco, Taito, Data East, Irem, Hudson (who helped make the PCE) and others in the late 80s. By the early 90s things had been blown wide open with pretty much everyone but Square and Enix making games for rival consoles while still making NES, GB and SNES games. Plus the whole time NES developers were still making computer games on PC98, MSX, X68000 and other platforms without any restriction.
And Nintendo was taken to court over strongarming retailers with anticompetitive monopoly practices, not developers. Developers were freed because the market started supporting viable alternative consoles like PCE or Genesis and Nintendo was forced to loosen their grip.