Is there an actual legal distinction between the two? Even if there is it seems like in a corporate world that could be quite messy because the corporation it self could be split into multiple legal entities so if you have a group wide IT department that provides the images for developers to use it could still count as distribution.

I'm agreeing with you because the alternative would make deployment processes of snapshotting built images for faster startup time against the law. If you couldn't use AMIs in AWS because the Oracle JRE is installed but instead are forced to install at launch time then that makes Oracle largely irrelevant to use in the cloud - no one wants to limit their startup time by a multiple minutes to download and install for a scaling event (and barring any network issues on their servers if hosting the installer package is seen as distribution as well). I haven't heard of any issues with moving around your own internally built virtual images with Oracle Java if you have accepted the licensing agreement for during the build and snapshot process, and using docker seems no different.