With OAI and Gemini already having anti-distillation measures for quite a while now, I thought Anthropic was purposefully letting Chinese labs distill in hopes that it would improve their safety and alignment by default (at least closer to Claude's level).

Apparently not. (Or not anymore.)

It's not like they can actually prevent distillation anyways even by hiding the thinking output, since you can just turn extended thinking off and all current Claude models will switch to thinking in the open (non-reasoning output) instead whenever it encounters a hard agentic task. So all it takes for distillation to continue to happen is for some real users to sell a competing AI lab their real usage trajectory data which is entirely undetectable by definition, and many people would probably be glad to do it.