In most cases, the acceptable practice is simply to send a communication that the organization (or individual) does not wish to move forward with the application. By leaving things open, that creates some delays. Overall, ghosting may avoid conflict in the short term, but it creates additional uncertainty about perceptions and expectations.
In the particular case, I treated it as a rejection and moved on. The experience would make me hesitant to pursue future roles at the organization. It is better to simply provide timely communication, and extend best wishes to the parties involved.
If I am hiring and things change internally at the organization, I always reach out to prospective candidates I have interviewed and let them know there has been a change in circumstances. It leaves the door open for both parties with a potential opportunity to work together in the future.