What is meant by "heard the word of Allāh and then distorted it"?

Imām Ibn al-Jawzī (d. 597/1201) summarized the scholars' opinions in his book "Zād al-Masīr" as follows:

1. They read the Torah and then distorted it. According to this interpretation, their hearing of Allah’s words refers to the transmission of revelation by their prophet, while their distortion refers to changing its contents. [Mujāhid, al-Suddī, and others]
2. They were the seventy people whom Moses chose. They heard the words of Allah directly at the mountain. When they returned to their people, they said: "He told us such and such", and at the end he said, 'If you cannot leave what I have forbidden for you, then do what you are able." This was the opinion of Muqātil.

The first opinion is more accurate. Some scholars, including al-Ḥakīm al-Tirmidhī, the author of "Al-Nawādir", strongly rejected this second opinion. He argued that Allah only spoke directly to Moses, otherwise what distinction would he have had? He counted this report among the fabricated stories narrated by al-Kalbī, who was known to be a liar.