Anthropic was chirping about Chinese model companies distilling Claude with the thinking traces, and then the thinking traces started to disappear. Looks like the output product and our understanding has been negatively affected but that pales in comparison with protecting the IP of the model I guess.

I don't think it ever has. For a very long time now, the reasoning of Claude has been summarized by Haiku. You can tell because a lot of the times it fails, saying, "I don't see any thought needing to be summarised."

They are trying to optimize the circus trick that 'reasoning' is. The economics still do not favor a viable business at these valuations or levels of cost subsidization. The amount of compute required to make 'reasoning' work or to have these incremental improvements is increasingly obfuscated in light of the IPO.

Anthropic always summarizes the reasoning output to prevent some distillation attacks

Safety versus Distillation, guess we see what's more important.

CoT is basically bullshit, entirely confabulated and not related to any "thought process"...