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No they didn't I watch it
He comes out of the pokeball and evolves
For poliwhirl episode? Nope. Earlier in the episode, Poliwhirl takes the Kings Rock Ash won andis passed through a machine in the Pokemon center in its Pokeball. The next time it is called out of the Pokeball, it evolves.
From here: Misty's Politoed - Bulbapedia, the community-driven Pokémon encyclopedia
Misty took Poliwhirl to the local Pokémon Center to be healed, with Poliwhirl picking up the King's Rock that Ash had won in a tournament on the way. Misty did not notice this, and simply gave Poliwhirl to Nurse Joy for treatment. Shortly afterward, in a battle against Team Rocket, Misty recovered her Poliwhirl via transfer machine from another Pokémon Center and let it out. It was summoned wearing the King's Rock, surprising Misty when it evolved into Politoed before her eyes. Misty was thrilled with her newly-evolved Pokémon.
Since Poliwhirl went through a transfer machine, that counts as trading, I think.