This means that anyone distributing GPL code is in violation of the GPL

not exactly. if their changes are considered as derived work from linux, then the GPL controls what they can do with it (namely, distribute it under the GPL). for non-derivative works it's indeed their call. for the kernel specifically it's a somewhat grey area whether one can create a non-derivative work, see all the 'are binary only modules legal' discussions of the past decade or two. based on past RHEL versions (and the RHEL6 beta which did come with patches), the majority if not all of RHEL's modifications fall under the derived work category and therefore RH can distribute them only under the GPL.