Couple years ago, we had a lot of talks saying that engineers should have slack time to polish things. That's kinda counter-productive if slack time goes into working for other companies.
If they entered agreement (no matter legal form), that led company to believe that they will dedicate full time equivalent to given company and then did the same with another company, and charge both for full time, then it's obvious scam. It's simply beyond mental capacity of regular human being to carry out such contract.
People tend to rationalize latter one, but they will end on bad side of the layoffs, because it's simply unsustainable to pay full compensation for half-time work.