If you want to understand the translation philosophy of the NLT, then you need to go back to the Living Bible, written by Ken Taylor who later founded Tyndale House Publishers and oversaw the hierarchy of committees of scholars who translated the NLT.
I met with Dr. Ken Taylor twice in his office in Wheaton, before his passing.
Romans 8:2 (Living Bible)
For the power of the life-giving Spirit—and this power is mine through Christ Jesus—has freed me from the vicious circle of sin and death.
In the New Living Translation, there is a footnote that "νόμος, ου" could be translated "νόμος, ου", rendering this as the NLT's own footnoted version...
Romans 8:2 (NLT footnoted reading)
And because you belong to him, the law of the life-giving Spirit has freed you from the law of sin that leads to death.
The word νόμος, ου (nomos, ou; Strong's 3551) is nominative in the first occurrence, genitive in the second.
nomos became the established name for "law" as decreed by a state and set up as the standard for the administration of justice.
It carries a concept of codified legal authority and written administrative "power".
This translation's philosophy
Dr. Taylor's philosophy of the Living Bible was to have an easy read for children to understand what the Bible said. His purpose for the NLT was to make that read more scholarly easy read for adults. It was not intended for word studies or exegesis, but for a public reading among the laity. He told me himself that he agreed that the NASB was preferable in study, as he said, "If we want to study the words, then we need the words."
Even the NLT's footnote that "power" could be translated "law" was there to empower a preacher or Bible teacher to explain the text more to the laity for their understanding. Adult beginning Bible students could read and understand the basic meaning, but also recognize that the meaning goes deeper than just one English word can carry. Knowing that the Bible keeps going deeper in its meaning is a key to understanding it, after all.
In this situation, for a general application of how it works out in our lives, Paul is explaining the "grip" or "power" that sin can hold over people and that Jesus helps release us from that grip. So, "power" isn't exactly misleading. When the preacher explains the role of the "law" in that "power", then Paul's larger point will make sense to an audience that does not know Greek and has little time to study the Bible during the week.