How can it be legal, at least in the EU, that if you are 1 hour + 1 minute late to pick up a car rental that you already paid for in full, plus full insurance, that they cancel your booking, rent it out to another customer and keep your money with no refund?

This is the case with SIXT car rental at least, probably others. This weekend in Portugal this happened to me and one other person who was in the location at the same time as me. It is in their (extensive) terms document.

Surely this can't be legal as the payment for the product / service has already been made. What difference does it make to them where the car is? They are making double the money for the same service. Illicitly it seems.

Legacy, bureaucratic, dinosaur companies like this are a old-world-mentality plague.