Yeah the blog post isn't saying distillation is illegal, it's saying that it should be illegal:

> These [distillation] campaigns are growing in intensity and sophistication. The window to act is narrow, and the threat extends beyond any single company or region. Addressing it will require rapid, coordinated action among industry players, policymakers, and the global AI community.

> Illicitly distilled models lack necessary safeguards, creating significant national security risks. Anthropic and other US companies build systems that prevent state and non-state actors from using AI to, for example, develop bioweapons or carry out malicious cyber activities. Models built through illicit distillation are unlikely to retain those safeguards, meaning that dangerous capabilities can proliferate with many protections stripped out entirely.

> Anthropic has consistently supported export controls to help maintain America’s lead in AI. Distillation attacks undermine those controls by allowing foreign labs, including those subject to the control of the Chinese Communist Party, to close the competitive advantage that export controls are designed to preserve through other means.