The scariest part about experiences like this is the time wasted and the time spent under tension. I normally can solve algorithmic puzzles pretty well without studying much, and I'd be pretty fine with a weekend of studying. But it sounds like a nightmare being strung along for months before being subjected to 5 rounds of 1 hour of being under scrutiny from another person.
as human beings, we are expected to behave differently when others are watching us, than when we are alone e.g. why lock doors before changing dress, or why cover mouth when yawning, or why not swear in an office etc. Naturally, we don't speak everything we think, lest we air the dirty laundry.
Do you judge a building during construction ? Do you judge an author by his first drafts ?
Either judge the final product, or only judge the process, or only judge speed of execution. And if you want to judge all three, then leave the candidate alone and let them think in their underpants and smoke if that's what gets their brain juices flowing.
As it is, they want to judge your thought process, your final result, your speed, and your ability to perform when someone is standing over your shoulder. It's a bit silly, mainly because it's not representative of any real-life scenario. Candidates who are introverted (exactly the IT geek types they want to hire) would have a major anxiety issue with the scrutiny part of it.