Do they have Peter's first epistle in their Bibles.? Do they have verse 5:13 of that epistle in their Bibles? If they do, then they have that "tradition", but must have just forgotten about it when the Roman magisterium came to town.
This is what we know:
1) Christian scholars overwhelmingly believe the reference to Babylon was a codeword for Rome.
2) Early Christians, according to ALL of the evidence, believe that Babylon was a code word for Rome.
3) Early Christian writings (those of the Fathers and those of apocryphal writers) use Babylon as a code word for Rome or say that Babylon is a code word for Rome.
4) No one apparently denied the obvious until they, the Protestant Revolutionaries, wanted to separate themselves from the pope.
5) You can't refute any of the above.
6) You have presented exactly no evidence against the above.