[throwaway2245]

I disagree with your statement that it was respectful.

Accepting your scenario, this suggests that they did not really want to hire the candidate and at best thought they might settle - when it came to it, they were not even willing to compare the candidate at the next stage, despite already asking them to do this work.

They strung the candidate along.

[tidepod12]

You say "strung along", I say "they were willing to give OP a chance at the job even though OP was not fully qualified for it, and when it was decided that the role was no longer available to OP, they told OP that rather than having OP waste their time giving a pointless presentation that wouldn't have changed anything".

[throwaway2245]

I say "They asked OP to do a bunch of wasted work on the off-chance that their prize candidate was not available - even though they were not (under no circumstances) interested in considering the OP against the prize candidate"

There's a simple and known solution to not have to do this - which is to conduct fleets of interviews at the same time, so that you can fairly and accurately compare the candidates.