No - you can't distill if what you are given doesn't have the thing in it that you want to distill out of it.
I don't know why it's so important to you to use the word "distillation", but it's the wrong word to use.
BTW OpenAI on twitter also said that Kimi 3 "cannot be explained away by distillation or anything like that". The timeline of how long it takes to train a model and when Fable was released don't even line up. This is just Anthropic as usual trying to manipulate the US government into helping them shut down competition.
Distillation is absolutely - and uncontroversially - a valid term for what is happening here.
This isn't really a debate, I'm not making a fine point - just check with all of the various defintions of the term.
Moreover - the 'reasoning traces' are not required for distillation at all.
Finally - it's entirely possible for them to have used Fable for later stage fine tuning.
It's fair to be skeptical of Anthropic (and everyone else) - but this is 'distilling'.