It doesn’t look like fraud to me, so I think we can put the pitchforks away and call off the attack dogs!
There are a great many distributions based on Ubuntu . Some long-lived like Mint and others which don’t last. Looking at the distrowatch page, and the news page for Runtu, it appears to have been around a little while now. We (Canonical) tend not to ‘audit’ every single derivative of Ubuntu.
Derivatives can be called pretty much anything they like, within reason and within the bounds of our (and other people’s) trademarks. The Ubuntu trademark policy allows for derivatives to exist, and we welcome a wide and diverse community of distros based on Ubuntu.
I think perhaps you’re overthinking this naming scheme based on conversations we’ve previously had about an Ubuntu Cinnamon Remix / Cinnabuntu. The point I made is that we discourage *buntu based names, and have done for some years now. We encourage names like “Ubuntu Foo Remix” especially for derivative distros which wish to become an official flavour.
You asked if we should ‘welcome runtu as a flavour?’. No, because it’s up to a distro whether they want to become an official flavour. Not every derivative does - see for example Mint and elementary. A “flavour” of Ubuntu needs to be built completely from the Ubuntu archive - something which Mint, elementary and indeed Runtu don’t do. They all have additional 3rd party repos or PPAs enabled.
But that’s fine, no derivative has to become a flavour, it’s just an option if they want to work with us, and with the other flavours on the commons of packages in the archive.
So in answer to your question, no, Runtu isn’t a remix, flavour or fraud. It’s a derivative distribution. I wish them every success.