But they rely on distilling the output of american leader models. Which will probably train against their own harness.

Someone has to do the baseline training, development, and innovation. it can't be clones all the way down

Why not? Humans are (very nearly) clones all the way down.

Citation needed, SOTA labs surely has technical protection and legaleese against using them for training. It's been done in th past but what indicates this is still the case?