I mean, it's personal preference but I'd feel awkward working with someone after giving out a massive "I don't trust you or your friends" vibe like that.
I base it on project expectations and respect.
With a young band who just want to record and bish bash bosh they've cut a record, I don't give out overnight demos.
They sit and listen properly on the day and give me their attention and feedback there and then.
Maybe I'm trying to implement some kind of discipline; I don't know.
With older or more experienced guys I'll usually give out demos because I want their proper time honoured feedback.
I want them to be happy because if they're happy they come back.
Usually people like that aren't one bit interested in spreading around unfinished demos anyway.
For those reasons, it's never been a problem.
Also, most of the people I record are friends, or at least friends of friends. Someone at some point vouched for them.
I wouldn't give any kind of demo to a stranger on the basis that it might be good enough for them, so why pay for it? Just cut and run.
It's never happened but it wont.
I had a know-it-all band ask for stems to play with overnight once. No chance! I do the hard work then hand over the blueprint???? Don't think so.