Phil, I believe you're mistaken. Per the member guide,
If you are already a member of the frequent traveler programs of any of the LatinPass airlines you are technically a LatinPass member. You are already entitled to the benefits of LatinPass, and therefore, do not need to enroll again.
All of the awards offered by the LatinPass generic program are also available to members of any of the member airlines' programs.
If someone were to transfer miles from his generic account to his Distancia account in accordance with LatinPass's published rules (which, by the way, say nothing of a limit on transfers),
...mileage may be transferred from a LatinPass Generic account to a LatinPass Member account. (Certain restrictions apply on enrollment bonus miles.)
then it would be completely reasonable to want to redeem those miles for Marriott Rewards points or KLM tickets.
I encourage you to look at Distancia's literature, which confirms this.
This is another example of LatinPass and its partners completely ignoring written program rules.