What I’m asking is, was the legal status of the Emperor reduced as such that he had no right to exercise political authority, or did he retain powers that were just unusable because some of the constituents of the empire like the Kingdom of Prussia, Electorate of Saxony, Electorate of Hannover, Electorate of Bavaria etc were as powerful as fully sovereign states and just wouldn’t listen to the Emperor?
I think you're actually mixing up de jure (a matter of law) and de facto (a matter of fact). De jure would refer to authorities that he might theoretically have under the law, but not actually have. For example, his authority as Emperor was de jure and not de facto (he had no real power but had some legal argument that he did).
Now to answer your question with the corrected terminology.
De facto and de jure, the Emperor held his own lands over which he did have significant influence over just like other member states of the HRE would have held their own lands. For example, the last Holy Roman Emperor, Francis II, was King of Hungary, Bohemia, and Emperor of Austria at the same time as being Holy Roman Emperor. Being Holy Roman Emperor gave him no real authority, as you've mentioned, but he did have very real authority over those lands he directly ruled de facto, though Francis II's grip on some of those was those tenuous at times.
Despite having perhaps extensive holdings and no doubt political influence, being able to coerce Kingdoms who may not have the same interests as you is not as simple as "I am bigger/stronger," or "I am Emperor." You're right in the second half of your question. Even smaller sovereignties in the Empire would often band together or align with larger constituents to avoid political pressure and to advance their local geopolitical interests.
The title of Emperor carries with it intrinsic cultural authoritative value, but if it's an Emperor that didn't conquer you with an army, he doesn't really have much leverage.