If someone identifies a niche that they're interested in, later signs a confidentiality agreement to review an acquisition target in that niche, makes an offer that's rejected, realizes that this niche might not actually be that difficult to build in, and attempts to start their own business in the space, is that indisputably impropriety and in violation of the confidentiality agreement?
How binding/defensible are confidentiality agreements in the US, especially (1) given individuals are often looking at many deals in the same space, and (2) in cases where there is no real IP/moat?
Now if you learned something proprietary in your due diligence, and you leveraged that to compete against the Seller, that might be a different story.
Generally, most small businesses view litigation as a last resort, and they aren't going to go looking to sue you under an NDA unless you pose an existential threat AND their likelihood of success is relatively high. At least that's my two cents.