Earlier quoted context omitted.
If life's too short to continue with the final stages of an interview process, I don't know what to say. The whole idea, if you do it right, at least, is that you only give this test to developers that you already know you want. That means that for those developers, this is not one of dozens of tests they need to do, it's the one test; or one of a few, if they're that lucky. And if they're not interested in putting a…
Depends for many people there is not a shortage of jobs to apply for, so coding a path through a maze which is just regurgitation rote memorised algos is a filter for us. I do agree about a daylong set of interviews with 4 or 5 people that's also a filter id use.
In my experience, these sort of tests do often seem to be used by the more interesting, more competent kind of companies. The first company where I encountered this (14 years ago), had only highly competent developers, many of them committers to various open source projects. About the recent one where I wrote a customised version of A* (because of the presence of wormholes, which made it not remotely rote for me or for most people, I'd expect), I of course don't know how it would have turned out had I taken the job, but if they select for this kind of thinking, I see that as a very positive signal about the kind of work they do and the kind of people they hire.
At companies that didn't have this kind of test, the quality of their developers was a lot more hit-and-miss.
At least for permanent employees; I've never encountered this for freelancers.