[mbfg]

It's absolutely status quo. If something other than this happens you should be shocked. There is the concern over lawsuits etc, which is real, but really, the issue (I believe) is that many companies really can't articulate valid reasons why they took the person they took over you. It's rarely about ability, experience or drive, but more squeemish things like cultural fit, personalities, and other 'like us' decisions like ageism, sexism, tribalism, etc.

Frankly, you should be honored that they actually contacted you to tell you they didn't want you. It is very common for companies to just hope you forget.