Earlier quoted context omitted.
The problem you are describing is interview variance and hiring bias, not leetcode. This happens irrespective of interview style. Many companies have question banks that are specially designed to be fair/have some contextual relevance (ideally) to some "realistic" problem. Or at least, many of the companies I've interviewed at follow this model. I consider these coding questions to be "leetcode" style because at the…
Question banks that are too big: huge variance, and OP's point stands. Question banks that are too small: leaked on eastern forums immediately, candidates show up reading answers out to you (some of the guides include guidance on when to pretend to think, I am not kidding). The idealized version of "question banks" might work. The real one does not; you'd require employees constantly scouring forums in every language…
There will be bad actors regardless of the interview style, thats why companies have multiple interview types/styles/rounds to sus out a candidate, as you probably know.
If they BSed their way through a leetcode interview, then they probably won't make it past a behavioral interview where they have to go in depth on some past project. And if they BSed that as well as every other round, then hey maybe they are crafty enough to succeed at the actual job.