While I think its all a bit of a nonsense, I am sure the players are all totally aware of whats going on so the idea they are having "dreams smashed" I think is a bit over the top.
Re getting paid, I am sure I read it somewhere that anyone called into the training squad was paid, but looking for it now, I found this as part of a news story prior to the 2021 6Nations.
England players would receive £17,000 as part of a full match fee. Any players outside of the 23-man squad wouldn’t earn anything, even if they participate in squad training throughout the seven-week long tournament. Now though, the five-player committee’s decision includes all members of the squad, not just the match day 23.
So although anyone in the final squad was paid, those who attended training but didn't make the cut, were not.