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'.