Earlier quoted context omitted.
Stories like this make absolutely no sense to me, and yet I hear them all the time about Stripe. Why not just tell the candidate that they aren't getting an offer? Why make up elaborate stories about headcount? Why say you're going to follow up? It's clearly not a bandwidth issue since they took the time to respond anyway. Even something like "We've filled all positions. Your application was strong, but not strong en…
Saying that they ran out of headcount is both telling that they won't offer and offering a reason, which is exactly as your example: they filled all the positions. It's a polite and somewhat sugar-coated reason instead of bluntly saying that they thought the person was not good enough, but it's standard to be polite when rejecting candidates.
It's like if your doctor tried to be polite to you by not mentioning some serious disease because he was afraid it would make you feel bad. It might indeed make the candidate feel bad to hear about their (perceived) deficiencies - but if they do hear about it then they can do something about it!