Earlier quoted context omitted.
The "chit chat" is a basic part of human interaction. Even for remote companies it still happens.
100%. Not only does strengthening social bonds with your coworkers make work more enjoyable it also makes the work product better. People that have the mentality like they're just a robot cranking out work units do worse work and they make their teammates worse. In many teams a moderately skilled engineer with very high social IQ is worth a lot more than another technically talented engineer with poor social IQ.
My ability to feign interest in your baby pictures does not in any way indicate my ability to deliver a sprint task.