I sincerely admire the geniality and compassion. Like you, I have participated in dozens of auditions, on both sides of the coin.
Giving you and this candidate in the OP the benefit of the doubt you seem to desire, here's something I've noticed about these types of audition candidates:
Once in awhile you do get someone show up like the dude in the OP, under-equipped with a Fender Mustang practice amp, and doesn't know any of the songs despite having three weeks to prepare. Simple stuff like "Can't Get Enough." And despite your frustration over the apparent waste of time, you decide out of the goodness of your heart to just let him play. Let's see what he can do on his own terms. And he blows you away with his musicianship. Wow! The dude can play!
But being able to play is only one part of what you really want to know about your audition candidates. It's hardly the only qualifier for a slot in a band. Just as, and perhaps even more, importantly: Is this person a team player? Will he be a good fit? Will he get on the same page with the rest and support the goals of the project? Will he prepare OUR playlist in a way that benefits OUR project? Will he be where he needs to be, when he needs to be there, doing what he needs to be doing, autonomously? Can he handle the responsibility?
Coming into an audition thinking you can just wing it and dazzle people with your musicianship and ignore the playlist and other important aspects speaks to a larger work ethic issue. My experience with these kinds of audition candidates is they tend to remain a bit rogue and detached from the goals of the project and how to best serve it. The best you can do after these kind of auditions is wonder, and that's what most of these posts are doing; wondering if this guy is any good for the project, when an audition is specifically designed to put that question to rest.
I think it would be pretty easy for a lot of us to go into an audition and pull off some impressive riffs from our personal pet playlists and prove you can play. It takes a little more effort and proving to convince the band you will be an asset to their project, and coming in completely unprepared for what the band really needs from you is a gigantic red flag and warning of bad things to come. To assume otherwise and give the benefit of the doubt to these auditioners is a risk not worth taking. IME, IMHO, of course.