I think where the definition may be be invalid, is in the creation of 'unrelated data sets for training' models, for unrelated issues.
Creating training sets that mach a models core training, is definitely distillation, it does not have to expose the reasoning traces.
Synthesizing data for some arbitrary thing ... I'm not sure that would be the same thing.
It's hard to draw the line.
But the Chinese models are absolutely distilling - and would not be competitive without this distillation.
At the same time, there's a lot of real innovation and regular building going on at the same time over there.