Distillation in AI is when a small model learns to copy a larger model's behaviour. Technical AI vocabulary. Not concerning. Outside AI, it just means concentrating something (as in alcohol production). If your kid uses it constantly, ask them where they first heard it, not to police their speech but to understand which online community they are in. Most slang of this kind moves through TikTok and group chats, so seeing it in your child's vocabulary just means they are plugged into normal teen internet culture.