> People at the big labs have been terrified of losing the chain of thought because they currently monitor it

Yes

> to prevent users from using their models in certain ways they consider unsafe or bad for their business.

No.

That's not the only reason why they're terrified of losing CoT, which makes your statement a mischaracterization - a lie.

They don't want to lose also because CoT is one of the key tools in alignment training.

> Personally I think chain of thought monitoring is a bad way to do this and obviously needs to be replaced by some way of analyzing the model's activations directly.

"Personally"? That's literally the consensus amongst, like, everybody. Nobody in the field thinks CoT is an optimal way of monitoring. But it's the best way we have now.