Earlier quoted context omitted.
This is a false dichotomy. Specific theory that is hard (and useless) to memorise all details can be easily referenced if you are knowledgeable enough in a field, if you know about a red-black tree, the gist of its properties you can easily Google usage cases if you've forgotten, examples of it and algorithms related to it (rebalancing, how it relates to search, etc.), if you had never studied, used or seen one there…
Some companies want to test if a person spent time preparing for the interview. So asking all those quiz questions does make sense even if they are no relevant. At least it shows that the person knows the rules of the game and is willing to invest substantial efforts to follow them even if the rules are arbitrary and irrelevant for day-to-day activities.
Stop supporting baseless metrics for assessment just because some old person used them before you showed up. We can and should do better.