Let's get the answer to this question out of the way quickly -- no, Apple does not test the loyalty of new engineers with fake projects. Jacqui Cheng at Ars Technica looked into the veracity of a rumor that was given life by author Adam Lishinsky's book Inside Apple, which posited that some employees were "hired into so-called dummy positions, roles that aren't explained in detail until after they join the company."
Later on, Lashinsky spoke about the book during a presentation at LinkedIn, and an audience member claimed that a friend had worked for nine months on "fake products" at Apple before moving to a "real" project. This claim, which was captured on video and widely reported by the Apple media, took on a life as a fact.
Cheng said that several of her friends who are Apple employees were dubious about the claim, so she interviewed current and former Apple engineers and found that none of them had ever been assigned to a faux project. One engineer came right out and told Cheng "I find it suspect that they'd ever waste their own and the employee's time on something that didn't directly contribute to their bottom line somehow." An employee currently working at Apple told Cheng that "It's a lot easier to have someone sign an NDA and then fire them if they violate it."
So Cheng went to the source, Adam Lashinsky, who said that he never meant to imply that he was talking about fake projects. "The concept I was trying to describe might best be worded as 'placeholder' positions or 'unspecified' projects," explained Lashinsky. As for the audience member at LinkedIn, it was more likely that his friend was assigned to an experimental project that never worked out and was eventually canceled.
With Cheng's post, we can hopefully put yet another stupid Apple rumor to rest.