It seems like it could go either way to me in the US (not a lawyer, but someone who has a fair amount of experience in reverse engineering / fair use issues).

On the one hand, it is fairly clear that producing source code with the explicit goal of reproducing a 1:1 binary is in no way transformative, so that's out. This would be a really hard argument to even attempt.

On the other hand, these projects are mostly free, intended for owners of the game to play the original game on a different platform or in a modified format, and not likely to have a negative effect on the original work's desirability or value. And, the reproductions aren't complete and alone usually produce limited to no value to a consumer (usually, they won't start without the original game files). These are the other important factors considered in fair use determinations and generally go the way of these being OK.

So, it's hard to say. With reverse engineering and copyright in the US in general, context is crucially important; something that would be completely illegal for one purpose (ie - decompiling and recompiling a competitor's software to distribute it without a license or use it internally without purchasing it would be obviously illegal) could be OK for another one.

In a sane world, if brought before a court, the binary itself wouldn't have any protection unless hand authored. The actual creative work/human expression was the source code. The entire point of compiling is to strip that extra data out, leaving pure functional logic that doesn't even strictly match the source logic thanks to optimization.

Then a freshly written project would be completely different with no derivative elements at all; the only commonality between the two codebases is their functional elements. You can compile a decomp into the same binary, but that's only to prove functional equivalence. The intended mode would be with a modern compiler that completely rewrites the logic (it might even have to if it writes it for a completely different computer architecture, which describes every retro console game). Then neither the source nor the compiled artifact would match.