It looks like Rio 3.5 397B could've simply been a semi-failed embezzling of funding

Here is the chain of events:

1. The model training received funding of R$500K (about $100K USD).
2. The initial model documentation claimed that it was a developed on top of Qwen 3.5 397B with fancy training and great improvements.
3. It was discovered that the model was a cheap, simple merge with Nex N2 Pro without any further training.
4. The model readme was updated to admit that it was based on a Nex N2 Pro merge, while still insisting that additional training still took place, and they simply uploaded the wrong model. The previously uploaded model was removed from HF.
5. They tweeted (among something that looks like an attempt at damage control) that the final trained model got lost, so they'll have to redo it from scratch.

This reads to me like "we pocketed the funding, delivered a fake result, got caught, and now promise to do the actual work to mitigate impact on us".