Case study during interviews.

I am interviewing at a couple companies, for a newer/smaller department they created, and they want me to do a case study and pitch. I've already heard on Reddit of applicants doing them and crushing but not getting the job later finding out the company is using their strategy from their case study. what are your thoughts and have you developed a workaround or a way to decline and still continue the interviewing process or even doing the case study and not giving anything useful to the company but still crushing?

lastly, but you can skip this part, a friend of mine did one to get into a law firm, I inclining about tech and software thought, but the law firm ended up not hiring him and then using his case study in an ongoing trial. He threatened to sue and they settled out of court just for time spent on case study.