You two are talking about different things.

You are pointing out that OpenAI can cancel user's accounts for almost any reason, and nobody can really force them to serve customers that they suspect are distilling their models.

That's one thing.

The GP is saying the government can make laws to make terms against distillation unenforceable. Without such laws, if you signed an agreement with OpenAI pinky swearing you won't distill, but turns out you did, you are liable in tort and OpenAI can sue you. (It seems nobody really cares about contract and agreements any more, but still...)

This is the other thing.

And I think you are both right.

What do you suppose the damages would be for a ToS violation? The difference between subscription rates and API rates?

OpenAI accused Deepseek of misappropriating trade secrets which could have serious penalties but seems like an awfully hard case to make.

Seems like we’d all be better off with a law that governs data sharing among AI companies, if that’s the policy goal.