So far, we have one ruling that says "model distillation by vendor A from vendor B with the intent to use the results to compete with vendor B in vendor B's domain is not fair use". Which makes a degree of sense.

It's possible that distillation for other reasons, with no intent to harm the vendor you distill from, would have been ruled to be fair use. But in law, intent matters.

What was the intent of the original ai companies (anthropic, OpenAI, etc) when they mass-distilled the entire internet to create their training data set?