How can you be discriminated on a technical level? Is there even a case of a candidate who sued a company at a technical stage we are aware of? This seems like a weak argument considering the hassle of time and potential legal fees, especially for someone who is looking for a job? Although I could understand why a candidate would try to bring a case like this in the US.

Anyhow, it's not even the feedback the problem, it is that I have enough work experience to understand some of those startups seem to operate on a thin line between what is a technical assignment related directly to their core tech and getting free consultancy. The least they could provide to candidates who have involved time is what was expected.

Just because it never happened doesn't mean it cannot.

Sure it is a weak argument, but when you get to cite that possibility and thus save 10 minutes of time creating more detailed feedback (which may or may not be used).

Yeah it's a variant on "anything you say can be used against you."

Any feedback you give can potentially be twisted to support some argument of unfair treatment. Even if it's frivolous, employers don't want to spend time dealing with that. So they just say nothing.