You might be right that this is legit. My understanding is nonpaper is industry jargon in international diplomacy for a talking points, a draft agreement, or something else that doesn’t include classified data, but isn’t marked to show attribution to the county that produced it. What’s on the page isn’t confidential, but that the US offered what’s on the page might be.
A piece of paper that says “the king of country x is a crook” isn’t confidential (scrawled on a napkin, for example). But, but on some official letterhead, you might want to control the piece of paper. Substitute “a crook” for “accepted a 100,000 dollar bribe one June 4th in a parking garage” might be classified, because it includes details obtained from surveillance or a spy. “ Nonpaper” means it’s non-secret info not tracable to the government who wrote it, to be used in diplomatic meetings.
This email might very well be completely legit. A fax that included the opinion of the US govt might be confidential. A no paper stating the same position, but not traceable or attributable to the US govt, is fine.
Seriously, I don’t think Hillary knows how to print from a computer so she wanted faxes. Converting it to “nonpaper” was probably her way of saying “just send it electronically so I can at least read it even if I don’t have a paper copy.”
The fact that she used the term without explanation in the email would indicate that she’d used it before and expected Sullivan to know what she meant.
And again, everyone is assuming that the email in question indicates that she was telling him to declassify it and send it non-secured. It’s entirely possible (I think highly probable) that all she was saying was send the damned things to me electronically but remove the heading so prying eyes couldn’t easily spot them as talking points.