Should I provide feedback to a PhD application I have received?
You will do the student a kindness if you send feedback. Try not to be harsh. Perhaps something like, "Did you know that company X already makes product Y that appears to incorporate what you have proposed as research? That being the case, I'm sorry but your proposal is not suitable for my lab."
I think you will have to balance the fact that the student's proposal is entirely unfit as a research project and the fact that telling the student how to "fix" his/her proposal may come across as soliciting a re-application.
If you have no intention of considering the application, I would maybe actually shy away from telling the student how to fix their proposal. I have found that too often such suggestions are taken to mean "please fix this and re-apply." And it could sound strange to say "This is already a commercial product. I am not interested in your application regardless." If the student comes back with a new proposal, then you are faced with the dilemma of twice (thrice) rejecting the student for yet another reason.
If you believe that the student could actually become a strong candidate by fixing his/her proposal, then telling him/her how to actually fix their proposal may turn out okay. But this may be a rabbit hole you do not want to go down.
I will admit that it pains me to answer in this way. As someone who has gone through the graduate school and job application process, I wish that I could always know the reason for being rejected. But having also had to deal with students trying 3 or 4 times to get into a my department's grad program after being rejected multiple times, I have sadly found it necessary to be pretty vague as to why I am rejecting a student, but pretty direct about the fact that I am indeed rejecting them.