Oracle decided, a few months ago, to exercise a right they have under the GPL: they have taken Red Hat’s Enterprise Linux and copied everything about it, rebranded it and called it their own. This is not unique to Oracle. On a basic level, this is what Ubuntu, Linspire, Mint, Xandros, CentOS, and others do – they build on another distro and package it out. Some may have different packaging or have different ideas of which kinds of software they can include. However, there is a huge difference, at least in my mind. With Ubuntu, Xandros, etc they do not exist to compete with Debian (on which they are based). Rather, they celebrate the fact that they came from Debian and make a point of contributing back to it. They also cater to certain markets that may not find Debian easy to use.
However, as I understand it, the point of Unbreakable Linux is to be a direct competitor with Red Hat’s offerings. And, if they “succeed” they will then cause Red Hat to fail. But if their Linux is just a repackaged Red Hat offering, who will make their Linux when they kill Red Hat? In other words, their success will also be their downfall, assuming they wish to continue as a Linux company.
So, while Oracle is within their legal rights under the GPL to create Unbreakable Linux, it may not be a great move.