Yes, I ran into this during an internal company hackathon. This was before LLMs.
We took a problem, designed an internal tool for it, and put some Bootstrap UI on top with some fancy CSS animations.
After wiring up the mock data, it looked convincigly real.
We did win, got congratulated by upper management, and were immediately asked if we could get this into production in a week, or do we need 2?
That last bit is why I'll never do one again.
Hackatons are commonly used as a way to take credit for & reap the benefits of another person or team's work, without attribution or compensation. And oftentimes, a promising hackathon idea will be "improved" by management & added to the creator's workload with tight deadlines (because the hard part is already done!) -- even if they don't necessarily agree with the "improvements".