> This seems to be some new HR practice that has become
> popular in the past 10 years or so. 

Do you know why I think they do it? So they can keep people hanging as
long as possible in case Choice #1 doesn't work out. If they send
letters to people saying that they're not interested in them and
something falls through with the person they offered the job to, they
may have to start all over again with new candidates. However, if people
are still waiting in the wings to hear if the position has been filled,
the company can call someone else and pretend that this person was
Choice #1 all along.
 
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