I think the legality matters less and having feelings hurt matters more. If someone pays you to build something, and you build a free version on the side, they'

I think the legality matters less and having feelings hurt matters more. If someone pays you to build something, and you build a free version on the side, they're really subsidizing a free competitor to their product. That's going to hurt people's feelings. And they're going to want to hurt your feelings too, maybe by burying you in paperwork.