Does this sound like I've been refused completely? B2 visa for 2 week vacation

Initially I applied for ESTA and it was travel not authorised. I have no criminal history and answered no to all the questions. I applied for B2 visa and they kept my passport. The interview was short and the officer said it would take 1-2 weeks to find out what was wrong with ESTA. I was given a green 221b letter on that day. I emailed a few times and they said the it was still undergoing “Administrative processing”

Today they emailed after 3 months of waiting to say they are returning my passport. They have said the following:

Your passport will be sent out from our office by close of business today, Please allow 5 - 7 business days for delivery.In the interim, processing on your visa application is continuing and your visa application status may be reflected as “refused”. The status of your case is currently under review and visa processing is continuing.

Do you think that the passport will come with a refusal letter? How do they usually communicate refusals, or is this just their policy since they have had my passport for so long. I cannot help but wonder if they say it is continuing but since they are returning my passport that it will come with a refusal letter.

On the day they wanted no documents from me, so I did not get any chance to prove that I have no immigrant intent.

Has anyone experienced anything similar? Are refusals usually communicated by mail or by email?