But I wonder how they were able to release Sonnet 5 during the period when even people inside Anthropic were legally barred from using Mythos/Fable?

There is word on the street that they allowed employees to work with a slightly stronger internal version of Mythos (5.1, if you will) that, in their parsing of the order, wasn’t restricted. If true, in practical terms, they ignored the order.

Iirc the ban only applied to non-Americans. While anthropic found collecting citizenship information on all customers too burdensome, it's a much smaller lift to collect such info for your own employees.

So I'm assuming at least a subset of employees could continue using the models during that time.

Although the ban was only for non-Americans, Anthropic said that they'd also restricted access to their own employees internally, because they had no other realistic way to apply the government's orders. I guess it's possible they were lying, but seems unlikely.