What you describe is unprofessional on the part of the hiring firm and discourteous to the job applicant/s invited for an interview. Canceling previously scheduled interviews happens, but not very frequently, at least in my experience.
What is more frequent: posting an ad to comply with a policy that all jobs be publicly posted, but conducting no interviews and hiring an internal candidate. Sometimes, firms post ads just to get a sense of the available talent, even though they do not intend to hire immediately. Again, interviews are not conducted in this situation.
Silver lining in your specific situation: You don’t have to waste time on this company. Better that they told you up front, rather than going on with the charade.
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