It's referring to human nature.

If you tell people there is a million dollar prize at stake (and to add to the financial stakes, charge hundreds per contestant), and details of the problem they will be solving, 100% of your contestants will try to solve as much of the problem as they can in advance (while, most likely, declaring it a crime that anyone else did so).

Anyone who claims otherwise is the sort of person you should protect your wallet around.

It is impossible to guard against this.

How can you work in advance if the hackathon isn't announced yet?

Because the "prompt" (basically, make a cool app) was revealed a long time before the hackathon, which IMHO was a big mistake. It's much easier to prevent such cheating if you make the early work irrelevant.

It's not human nature, because I'm basically asking examples of a software project or application that has been rewritten to the point of rote reimplementation.