I do understand how distinguish is used to differentiate between two things. However, I've also heard it once being used as: Jim distinguished it as an old dairy.
So I'm having trouble understanding the usage "distinguishing A as B". The question being, what are we distinguishing between in this case?
I was searching this website, and found that distinguish could also possibly mean difference between something and everything else. However, I believe I need more convincing.
Best Answer
The use is essentially what you describe, "difference between something and everything else," with a note that "everything else" is usually bit more specific.
For example, "Jim looked out the window of the moving car and saw a variety of large buildings dotting the landscape, each with a large mural facing the road. One had a picture of an octopus. Another had a picture of helicopter. Jim didn't know what they all meant, except for one, which had the picture of a happy cow. Jim distinguished it as an old dairy." Here the context implies that Jim is distinguishing this building from the rest of the buildings. He does this by identifying it as an old dairy, whereas he could not identify the other buildings.
Occasionally, this may be used without substantial context, if the context is heavily implied. For example, "Jim was distinguished as the most creative child in school." In this case, it's implied that Jim was distinguished as a creative child from the other children by his creativity, even though the other children weren't explicitly mentioned.