I had a somewhat similar experience. For one particular position we were interviewing a lot of junior and recent grad developers. Since so many of the applicants were relatively new to the game, they were almost all (99% I'd guess) extremely grateful for the honest feedback. We even had candidates asked to stay in contact with us and routinely got emails from them months or years down the road thinking us for our feedback and mentorship. It took a lot of extra time from us that could have been applied to our work, but we felt so good about being able to do that for people that it was worth it to us.
Then a lawsuit happened. One of the candidates cherry-picked some of our feedback and straight up made up some stuff that was never said, and went on a social media tirade. After typical internet outrage culture took over, The candidate decided to lawyer up and sue us, claiming discrimination. The case against us was so laughably bad that if you didn't know whether it was real or not, you could very reasonably assume this was a satire piece. Our company lawyer took a look at it, and immediately told us that it was clearly intended to get to some settlement, and never actually see any real challenge. The lawyer for the candidate even admitted as much when we met with them. Our company lawyer pushed hard to get things into arbitration, but the opposing did everything they could to escalate up the chain to someone who would just settle with them.
Well, it worked. Company management decided to just settle with a non-disparagement clause. They also came down with a policy of not allowing software engineers to talk directly with candidates other than during interviews when asking questions directly. We also had to have an HR person in the room for every interview after that. We had to 180 and become people who don't provide any feedback at all. We ended up printing a banner that said no good deed goes unpunished and hung it in our offices.