Yes, the team behind Yuzu and Citra is disbanding, so Citra is being discontinued. But it's an open-source project under a GPL license, so other developers can maintain their own version of it.
The strategies that Nintendo used for suing Yuzu wouldn't really work for Citra, as it's not a current system and doesn't even require a firmware/keys. Doubt Nintendo will bother either, they never did for older systems.