Can people just drop "fear of being sued" as a catch-all reason for any behavior? It is incredibly expensive and time consuming to file a lawsuit. The average person doesn't go around suing other folks regularly.

Filing a lawsuit can be quite profitable for the lawyers involved.

What's preventing someone from trying to extract $3M in settlement money from a rich company that doesn't want its reputation tarnished in a long running discrimination lawsuit?

And $3M is a lot of money that lawyers would eagerly represent someone that has an evidence of discrimination.

The time it would take out of your life (just because you hire lawyers doesn’t mean you’re spending no time on the lawsuit). And once you file that lawsuit it’s going to become public record that you sued a company you interviewed for, so there’s a lot of downside risk for the rest of your career. I understand the fear but I don’t think there’s realistically a lot of downside risk for employers to responsibly share some feedback. And certainly there’s no legal risk to just letting candidates know they went in a different direction.

they don't want the hassle of getting drag into one?