Insider Perspective: This can happen at big companies when they want a "lineup." They already know who they are going to hire, but for appearances, they will bring in 3 more people (usually two that are grossly under-qualified and one that is unaffordable). Then, after interviews, the pre-chosen candidate gets to shine as the ideal candidate. Inside recruiters are often masters at such setups, all created to have a paper trail of fairness in situations that are anything but fair.

It is terrible for the others in the lineup since they have 1. wasted a day 2. have hope for something where this is no hope 3. possibly hold off on other opportunities waiting for an opportunity that doesn't exist.