In Australia we do have unpaid gigs (internships etc) however the company offering that position isn't allowed to "make money" off any work that person does.
I think this is a pretty fair way to do it, they get trainees, however can't abuse people to make money off them.
Seems like this would be abused a lot though eg promises of full-time work or a better life only to be rug pulled when they find another gullible and desperate enough.
I guess everywhere can be vulnerable to this just if it's explicitly illegal or not, sad to see places try to hunt vulnerable people in situations where they will work for unfair terms instead of build high functioning teams which is think is more where YC is supposed to be aimed :(
I think this is a pretty fair way to do it, they get trainees, however can't abuse people to make money off them.