General Dynamics Mission Systems System Engineer interview questions

I applied online. I was contacted by HR via email only and asked for times for an intial hiring manager phone call. The interview went very well. My background was an excellent fit, and I was asked several questions by the hiring manager that showed their interested. Our conversation went on for the better part of an hour, at the end of which I was told they wanted to move forward with next steps and I would hear back in one day or two. I heard nothing for over a week. I contacted the HR rep several times, and was first told she would send a reminder with an update "no later than noon tomorrow". She also told me to contact her if I didn't hear back that afternoon. Several days later I get an auto-rejection email. The HR rep followed up saying "The hiring manager was very turned off when you told him you had other interviews scheduled." They claimed it was unprofessional, but then they also said I should only tell that to the HR person. The hiring manager directly asked me if I was interviewing elsewhere. What was I to do, lie? At the time I was in phone screen and technical presentations with 5 other companies. And the hiring manager apparently wasn't so turned off that he continued interviewing me over the phone for nearly an hour, asking detailed questions about my background and explaining the hiring process at this company. I was polite in my interview, and told the truth. It really sounds like the company was simply annoyed that they couldn't bring on a warm body, someone who was desperate for a job, and the certainly don't want to compete for the best candidates. The HR rep had the nerve to tell me I should never answer that question to the hiring manager and only to her. What was I supposed to do? Ignore the question? Lie? She never once called me, only sent a brief email to set up the call in the first place. It really sounds like GD/Bluefin doesn't have a good idea how to recruit talent. My recommendation would be to try elsewhere.