Frankly, I don't see this as the concerning behaviour the article describes. It is fine to try to protect against distillation through a technique like this. This will also allow them to, instead of blocking the distillation agents, respond with a poorer result/model, hindering the progress of distillation, momentarily at least.
I would guess that's their first line of defense; they should have more techniques to identify distillation because that's a very simple way of detecting the host and can be easily spoofed.
> This will also allow them to, instead of blocking the distillation agents, respond with a poorer result/model,
i.e. this will allow them to literally commit fraud against paying customers
1st, this technique is not fraud, and fraud is a separate accusation. 2nd, paying customers can legally and legitimately be banned and monitored for breaking terms of service, which probably includes things like using the model against U.S. export restrictions.
So if I change my timezone to Shanghai I deserve to get banned? Or get shitty model instead of what I’m paying for?
Evidence?
Banning is completely different than charging for a service you're silently not providing.
Evidence?
Do paying customers distill? Is it fraud to protect against distillers?
That's what capitalism is all about, baby! Especially if the customers don't notice.