The following table is a projection of coin distribution taken from the whitepaper

My question is, are the ‘coins distributed’ related to the year (i.e there only ever be 20% released by year 2, 70% by year 3 etc,), or is it instead tied to the number of nodes (i.e. if there are 500,000 nodes all coins will be distributed regardless of the year)?

No. The distribution rate is linked to the amount of data retrieved from network nodes…i.e… how much the network is used. I would take the data on the table with a decent pinch of salt, while I believe the calculations are accurate, the number of variables involved make it very difficult/impossible to predict.

The table above represents total coin distribution so does apply to both builders (10% of this total) and farmers (around 80%). Please note that the above table makes a number of assumptions making the actual coin distribution very difficult to predict with any accuracy.