Nope, Nintendo has no problem with that. It's when the video is monetized using their content that they have a problem. Like how if you make a shirt with Disney characters on it, cool, but if you sell it without the consent from Disney to use their property, then you're going to have problems. Joe knew Nintendo's policy on this and did it anyway, and when they wouldn't let him make money off of the video he pulled it and started ranting.
I'm fairly confident he continued to make Ninty content anyway knowing the regulations of the program if only just to get heat off of his "grand declaration" of stopping making the videos he already knew would be taken down.
I think this is a crummy policy but Nintendo is a huge company with their own advertising budget--budgets that indie studios couldn't dream of. Whereas indies may depend on whatever exposure they can get, Nintendo feels as though they want more say in how their brands are represented.