It may be perfectly legal to come out with their own version of AppGet, to base it on AppGet, and give it a name that is very close to AppGet, and if the developer wasn't a fit for Microsoft then they don't have to hire him.
But behaving in this way is like biting the hand that feeds you in terms of open source they come out sounding like a*oles.
When it was clear they didn't want to do an acqui-hire one solution would be to indicate that it was possibly they were going to create their own version of the product and perhaps 'purchase' the AppGet design/concept, or pay a consultancy fee for the time the developer was being interviewed - even for a token sum.
Microsoft isn’t serious about supporting open source at all. It’s just a gimmicky ploy to get users back from Linux to Windows.