You say
> Just not seeing the connection between using an interviewing tool and being a dysfunctional company.
This is problematic because you're not representing my position. It's somewhat of a straw-man. You're saying that I'm saying that the use of some legit interview tool spells dysfunction.
But I'm not saying that. I'm saying that the use of an illegitimate interview tool (timed, standardized tests) is a sign of dysfunction.
Whether or not you see a connection between using an interview tool and dysfunction is irrelevant, because we would both agree that there's a connection between using an illegitimate tool and dysfunction.
So the disagreement happens at least one layer back, at the point where I claim that timed, standardized tests are not actually useful for determining who will be good at a job. The disagreement, and the whole discussion, has nothing whatsoever to do with "just using an interview tool."
I think it's very important to be pedantic about this, because in a lot of cases you keep referring to the timed tests as an interview tool, and speaking about them that way fails to acknowledge that the tests are not capable of producing the kinds of evaluation output necessary for actually determining who would be good at a job.
For example, a great engineer with loads of experience and glowing letters of recommendation about how effective they have been in previous roles might just be a very anxious timed test taker and tend to do badly on timed tests for reasons mostly of anxiety. Since the test is artificial and has no relationship to the actual work they would do if hired, rejecting them based on a failure on the test is a poor business decision.
It doesn't even have to be as extreme as an anxiety issue with test taking. A person could just simply disprefer working in a constrained, timed environment like a browser-based IDE with a literal clock ticking down. They might be a great developer, yet cannot even write FizzBuzz in that situation because it is so utterly and unreasonably alien compared to the manner in which they would do work in a real job.
The tests just simply are not legitimate ways of measuring programming ability. They do not control for all of the bespoke ways a person can appear bad via a timed test, yet still be good, nor do they account for all of the ways a person can appear good on a timed test, yet perform badly on higher-level thinking tasks, open-ended time management, or creative tasks like system design.
Very truly, the tests, and organizations like HackerRank, exist because it's a convenient fiction for HR and management, especially in companies that doesn't have very much of a technology staff to vet candidates. These places are happy to drink the HackerRank Kool-Aid because it gives them all kinds of plausible deniability about hiring the wrong people. It's very similar to the way that management consultants, far from actually functioning in any analytical capacity that benefits their client, really just exist to sort out internal power struggles through means of credential and prestige. It's very much a status-signaling sort of behavior. And it's even worse in the cases when a company adopts something like HackerRank just because some other, supposedly fancy, company adopted it.
Because of all of this and much more, it's just very critical to continue pedantically ensuring that no claim of the tests being valid, legitimate evaluation tools goes unchallenged.