Since answering honestly is aparently a deal-breaker in your book.
Lying is part of the theater that is our current employer-employee relationship. Everyone knows this
But in regard to, you know, important stuff, such as matters of one's employment record -- you know they have ways of checking up on what you say, and that any company worth working for does exactly that -- right?
Also, not listing your most recent clients/managers as references (because why wouldn't they be glowingly positive?) can be seen as a red flag.
Reason for leaving is never told.
"What to do if they ask question X?"
"Just lie, like everyone else does."
"Except you know that won't work if in fact they do ask you question X, right?"
"Doesn't matter, because they they won't ask you anyway."
Weird.
In any case it absolutely is standard practice for a significant portion of companies to go this route (especially in more traditional sectors). Even if it hasn't happened to you personally, or to people in your bubble world.