Does Netflix have any other light-hearted fantasy show? I only recall heavy stuff like The Witcher, which isn't bad but it's a tough comparison with what Zelda could offer.

Because shutting down an external tournament because of piracy concerns is the same as wasting resources on developing 2 series.

From what I've read, Nintendo was starting negotiations with these companies but got freaked out when everything got leaked from Netflix's side before a deal was even struck. I thought I also read somewhere that Netflix intentionally leaked these negotiations in order to build fan anticipation and push Nintendo into moving forward with the project.

Well, that's messed up, I have to tell you. 

A lot of them. I don't have all the names but I have seen a bunch listed. Nothing like Zelda but more on the lighter side of fantasy.

After the past year? That's called a "favor"!

Ah, that is a more plausible explanation why Nintendo might freak out then the OT. Nintendo likes to control their IP and marketing in a controlled way so this would - and should really -  upset them.

I am not sure how I would feel about a Zelda series. I definitely understand why Nintendo would be extremely protective of that IP especially with how highly regarded it currently is. The problem is that Nintendo being overprotective of their brand is precisely what would make the show not great. Writers need to be free to go in their own direction with adaptations and the more restrictions that get placed on creativity, the worse the end product becomes. I am sure that Nintendo knows this and I just highly doubt that they would seriously entertain relinquishing control over Zelda right now to allow a decent adaptation to be made. Regardless of the rumored reasons for the cancellation, it seems more likely to me that Nintendo may have just been testing the waters and entertained a pitch for a Zelda series but were never that serious about proceeding. Besides, having a Zelda drought, if anything, builds hype for BotW2, why would they want to dampen the unprecedented anticipation right now with a TV adaptation? The risk of it becoming a "Star Wars Holiday Special" type situation is very high, in my opinion.

I think that it would be a far better idea to let writers adapt one of Nintendo's less successful or inactive IP's into a show. Earthbound would be fun, although it would probably make a better anime series than it would a live action show especially with it being a Japanese caricature of American life. Star Fox might work but it's not the 90's anymore and I am just not sure how easy it is for new sci-fi franchises (e.g. not Star Wars and not Star Trek) to find a lot of success with television viewing audiences. Metroid might work better since you can delve into the fantasy direction with the lore of ancient civilizations and not just be constrained to life on a starship, etc. Metroid is also the case where you can have a strong female lead without having to betray the character relationships of the show which, I feel, makes it more conformable to the desires of North American television audiences in 2021.

But utterly typical of Nintendo. They’ve always taken these sorts of things you incredibly seriously. Someone at Nintendo once leaked details about a Kirby game on N64... they found the body the next day, blood everywhere, torso mostly eaten. 

I still doubt this is true, but regardless, it’s probably for the best.