What trips people up here (me included) is that the problem does not mean "subsequences of T", it means "subsequences consisting of T". Then, the following words "in S" signify "subsequences of S".

So the problem is: "Count the number of distinct subsequences consisting of T in S" - i.e. "Count the number of distinct subsequences of S that consist of T", or "are equal to T", as noted by vivek.bits.

Even then, it is incorrect. These are not distinct subsequences, as they are all equal. They are distinct ways of forming the same subsequence.