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Mentor
Yes, most firms will continue to interview. Firms usually schedule the callbacks all around the same time and will keep those interviews and not cancel. The preferred candidate could take another offer, end up not wanting to come or move at all, fail to clear conflicts, etc. There can also be internal firm politics at play (ie, an influential partner wants the team to consider their preferred candidate).
Mentor
Yes, they do. It’s best to just let the process play out. If they want to make you an offer, they will at some point.
It depends. Some firms move more quickly for good candidates they like early on and some will drag it out.
Subject Expert
Happened to me recently. Firm gave me an offer about 2 months after my final interview, and in the meantime they interviewed and potentially made offers to at least 2 other candidates.
Turned the offer down for a better one, which felt great after they strung me along.