It's never happened to me personally, but I've heard of cases with others where a villager who was supposed to move in but had nowhere to plot their house sent a letter saying they'd changed their mind. It's possible if you have a lot of large PWPs, a lot of ponds/rocks, maybe a windy river, etc.
I don't know what happens if you do that, but it sounds like some of the above posters have experience with it. I don't know why the hell anyone would purposely make it impossible for villagers to move in. Even for plot resetting, you have to leave some space open if you want the villager to come.
I haven't done/tried it personally, I've only read accounts from people who have.
I'm not completely sure why anyone would do this either, but I'm sure the people who have done it have their own good reasons.
It might be nice for a themed villager town if there are only eight or nine villagers of the species, for example.