Think about it: even if they distill the shit out of frontier models, the model still gotta learn, right?
If anything, as you can see from the K2 Horizon release, aggressive (self-proclaimed) reliance on distillation does not result in a model that has remotely any frontier capability. Try asking K2 Horizon to write iambic pentameter for instance, or even give it the car wash prompt. I tried both these on the Q8 quant for the 7B model and the results were depressing.