I pushed back at the contract, and asked them to ask their lawyer if that was really necessary. When they insisted on a contract for the homework project I pulled out of the process. It just felt so wrong.
The worst part, is not that they would seek some way to freelance a small part of their system, nor that they would actually use ideas from hiring interviews in their product -- but that (it seems) they would so blatantly lie to someone they professed to want to hire that this was homework, when in fact it was not. Even worse was the feeling of disrespect that they wanted to freelance part of their system for USD450, trying to abuse the hiring process/ talking a big game about offers, to unfairly lowball the price. Like they are a well funded, established, largish YC alum, at least they can afford to pay market. Anyway, everytime I see "XXXX is hiring a YYYY in ZZZZ" on here from them, I'm reminded. Feels good to vent.
Just sad. Anyway, I'm not going to name names because this is unwise to do that in a public forum.
Anyway, I only added the above anecdote after writing the following comment.
This is why Triplebyte is so good. You do a single technical interview ( after a quick online quiz ), then get fast tracked to final interviews at various YC / silicon valley startups.
Sure, maybe not everyone wants to work for a smallish startup. But some of their clients are 200+ people. So...it's not all the same.