AFAIK, distillation typically refers to tuning on the logits of the larger model, so you wouldn't be able to do that with fine-tuning APIs (OpenAI + Google in our blog post). We fine-tune on the outputs themselves.
But broadly speaking, yes, we generate data using a large model, curate the best samples using metrics from the environment, and fine-tune on that data. This isn't a novel technique from an academic perspective; our focus is on applying it to different use cases (e.g. agentic RAG, agentic tool use) and models (OpenAI, Google, Qwen).
Thanks!