"When teachers of the Flower Garland school come to interpret the passage in the Flower Garland Sutra that reads, “The mind, the Buddha, and all living beings—these three are without distinction,” they take it to refer to three things, the one mind [of the individual], the enlightenment [of the Buddha], and the lack of enlightenment [of living beings]. In interpreting this passage, they are borrowing the terminology found originally in The Awakening of Faith in the Mahayana.
The Great Teacher Nan-yüeh in his interpretation of the two words “wonderful” and “Law” in the title, the Lotus Sutra of the Wonderful Law, borrows this same passage from the Flower Garland Sutra and takes it to be referring to the wonderful nature of the three elements [living beings, Buddha, and mind]. The Great Teacher T’ien-t’ai Chih-che adopts the same interpretation." -- Nichiren
The mistaken interpretations of the SGI and the Zen School can be traced back to the way in which they interpret such passages of the earlier Sutras. They are no different than the teachers of the Flower Garland School who misinterpret the above passage of the Flower Garland Sutra to mean that there are no distinctions between the unenlightened mind, the enlightened mind, the Buddha, and all living beings. The lack of distinction refers to their wonderful nature or Myoho, not to their phenomenal aspect. Distinctions and non-distinctions are two aspects of the fundamental Law of Myoho. To fail to make distinctions, to fail to point out errors of thoughts and desires, mistaken teachings, and evil men, is to abandon the teaching appropriate for this defiled age.