Isnt the regular keyboard on iOS typing also probabilistic? I thought the entire claim to fame of the original iPhone keyboard was how it could determine which key you meant based on letter frequency / word usage / etc. Does that mean it can also stop you from typing certain things? So whats the difference between the swipe interpreter and the fat finger interpreter?

A matter of degree.

The regular key-by-key will also do some probabilistic changes. Just less than the swipe interpreter.