They aren’t fulfilling their contractual obligations if they aren’t allowed to have a second job and are doing it anyway, so this notion is nonsense to begin with. If you get paid hourly you can’t be working for someone else while getting paid by the first company for the same time. For salaried, typically there are expectations of how long you’ll be working or even your availability.

The company I work for has more than three decades of experience with WFH, and it’s almost always clear when someone is trying to double dip. It’s impossible to keep it hidden for long. Eventually you will have conflicting schedules, and excuses start piling up. Even if the work is good, very few jobs are done in a vacuum where you never need to talk to anyone or work things through. Most situations like that are handled by subcontractors who have all the freedoms you’re talking about. In fact the only situation I can even think of that would fit the mold of how work is being framed here is through contractors.