Is there any law or anything else binding that requires Twitter to compensate users for confiscating their handles? If not, is this really surprising?
No law, but it is an incredibly dickish thing to do (quelle surprise!). Also, maybe sort this kind of thing out before announcing a rebrand?
Twitter has been doing this for ages though. Plenty of other examples of handles being taken from people and give to famous people. For example, if you registered @snoopdog early or whatever, these handles were routinely re-appropriated.
If you sued maybe you could argue there was some kind of implied contract? Hard to imagine it's worthwhile though.
As is his prerogative.
Though the honorable thing would've been to compensate him for it, this is not surprising coming from Musk.