It's not only disheartening, it's nearly impossible to recover from, for many people.
Weird little semi-relevant story: I've always known I wanted to write. I used to write story after story and book after book - they were good too, except it was always a different lead character- but always with the same name. I'd been using that name for YEARS (since I was in first grade, actually) and I'd never known anyone by that name... I thought it was destiny So I kept using the name and kept writing (and finishing) better and better manuscripts.
It was my good luck charm.
When I was 14, we were going through a box of old papers, and I found a letter (sent to a long-ago former address) with my hero's name on it. I asked my mother, who said that it was a wrong-address sort of thing, and she'd forgotten to drop it back in the box.
I asked "yeah, but who IS he?" and she said she didn't know. Then she said "Isn't that funny... you asked about it a lot when you were little too!" ... The postmark was the year I finished kindergarten.
The name didn't just come to me. It wasn't destiny, or a good luck charm... it was some random scrap of memory I'd been clinging to, pointlessly.
I was devastated for months.
I had a hard time writing for a couple of years after that. Looking for inspiration, I finally went through everything I'd ever written, and noticed that *every* book was reminiscent of something I'd read at one point in time or another.
Again, months of devastation.
I haven't finished a single story since I found that letter. I *know* it's a mental block... I know *I* can fix it. I just can't do it. Even as a semi-sane (okay, not sane, but at least reasonable) person, I can't use that name. I can't *make* myself type it, even in this post! And the insane part of me still believes I've lost my good luck charm.
Not really. I haven't finished anything because I'm too easily distracted now, and too caught up in the details of it, and, well, a little bit lazy. But every time I give up on the process, or hit a patch of writer's block, I DO still think of that name. And you can't help but wonder.
So your guy... he gets this idea in his head. "Okay, we're on this world, named X. X is a world that has Y and Z." And everything he thinks of after that is based on X.
Now the X is a lie.
Well, not a lie, but not as original as he thought it was either. I can easily see how he'd start to wonder if *any* of his setting was original.
Or... maybe he had a buddy that said "Dude, you're paying someone for a map? I'll draw you a map for free!"
Neither of those things makes it okay for him to leave you hanging, after agreeing to hire you, but...
at least you got a partial payment ?