Yes and no, the problem with Conker is that it was very crude, explicit and South Park like parody game that looked close enough to a kiddie mascot that Nintendo could get in trouble if advertised and some foolish parent got upset the cute character was actually perverted scumbag of a main character. 

Otherwise, games after Conker, like Eternal Darkness, Geist, Nintendo buying rights to Temco's Fatal Frame series and other published games like Bayonetta 2, the Devil's Third or Japan only titles like Zangeki no Reginleiv or Disaster: Day of Crisis would have been made or put out by them. They just want their M titles to not look like it could be anything but M rated and in case of NA/Europe not be TOO exploitative in showing females.

I'll never understand the Nuts n' Bolts hate. Probably one the most unique platformers ever created, I spent many hours with it.

My fundamental issue with it was that the overly pedantic physics turned what should have been straightforward tasks into tedious fiddly chores. It simply wasn't fun to spend half an hour building a vehicle only to find that because of one tiny misstep the challenge was unwinnable. The game didn't respect my time.

I don't think there can be any doubt.
When people look at 'The fall of Rare' they often point to the way Microsoft put them to work on titles that really didn't play to their strengths, or to what people liked about Rare.
It's no surprise there was a staff exodus to Playtonic.

MS gave Rare too much freedom. Nuts n Bolts for example was a game Rare had in the pipe works. The problem with Rare was they failed to deliver under no supervision so MS shifted there freedom to Kinect which turned out great for awhile. 

They did have a couple good gems on Xbox like Kameo and Viva Pinata. Sea of Thieves is MS giving Rare another chance at freedom.

I think that had Rare remained with Nintendo, they still would have declined, but would have released better games these past 14 years. And I believe so based on what known factors we have.

First, you have to remember Donkey Kong Racing. The game was announced prior to the GameCube's launch, and looked like a decent cartoonish racer, and seems to have been largely completed before the Microsoft deal went through. However, from what I can gather, Rare tried to rebuild it into a game called Sabreman Stampede. But that got cancelled because Microsoft wanted to focus efforts on Xbox 360 titles Kameo and Perfect Dark Zero. Not only was this a lost game, it shows how making several transitions in hardware must have been hell for Rare. Within five years, they went from developing N64 games (Conker in 2001) to the GameCube (SF Adventures in 2002), then the Xbox (Grabbed by Ghoulies in 2003), and then the Xbox 360 (Kameo and Perfect Dark Zero in 2005). Kameo was developed for all four consoles atvarious points. Had they stayed at Nintendo, that would have removed the GameCube to Xbox transition and would have possibly made the 7th gen leap simpler.

Grabbed by the Ghoulies showed the problems of Microsoft as a boss. It began development as a GameCube platformer in the style of Banjo Kazooie before being simplified on the Xbox. However, Microsoft pushed for the game to be released as a simpler and more linear experience. Hence, we got the critically panned final product.  In contrast, Nintendo has been willing to give its 2nd parties a lot of leeway in development time. Rare experienced this during Conker's long development, and Silicon Knights had a similar amount of leeway with Eternal Darkness. So GbtG would have probably ended off better on the GameCube.

Last, I think Rare might have been able to find a niche with Perfect Dark had they stuck with Nintendo. Rare spent a lot of time working on that series before and after the Microsoft aquisition. You had Perfect Dark Zero, which was in development for the GameCube and Xbox before becoming a launch title for the Xbox 360, and got features cut to be ready for launch day. And you also had cancelled games like Perfect Dark Core. Problem was, Microsoft already had sci-fi shooters, Halo and Gears of War, and wouldn't approve of a new game after Zero. With Nintendo, Rare would likely have been free to pursue the series.

Maybe you're looking at it the wrong way. The challenges were generally pretty simplisic, the actual game is building the right vehicle for the job. You didn't need to build an exact vehicle either, you just had to come up with something to get the job done.

You're right, sometimes you would have to go back and modify your vehicle because something just wasn't right. But for some people that's actually fun, trial and error is part of many vidja games. There were even levels I would replay simply because I wanted to try completely new designs after acquiring new parts. Which often allowed me to finish levels faster.

Nuts n' Bolts is a brilliant and unique game, shame we haven't seen much else like it.

Right, in racing levels you would often just build a basic frame and put a bunch of engines on it. Sometimes you could make a level easier by creating a fast driving vehicle that also had the ability to fly.

I feel like he's complaining about building in the building game.

im glad nintendo sold rare, at the time nintendo was in major decline and probably would not have lasted another gen. The sale of rare funded the DS and Wii development

Nintendo's dumbest decision ever.

It was the start of Nintendo pulling out of western development and partnerships.

I hope Kimishima goes the other way and creates new western studios, and create new new reliationships with western developpers.