I think there are legitimate reasons why a business might need to restrict employees from having second jobs. However, if those circumstances apply, they should include it in the contract and it should impact salary negotiations.
For instance, if an employee is working from home at two jobs at once, and makes an invention which they introduce in both jobs, then both companies might rely on this 'trade secret' to protect market share (including suing people whos 'steal' it. Some engineers are employed to come up with inventions, and if a business can't rely on their output to create competitive advantage then they are not providing the service they were hired for.
Similarly, a sales rep working for 2 businesses, or working in procurement at a government customer and sales at a vendor, could create a very nasty corruption lawsuit.
Finally, some jobs are responsive - for instance a site engineer or some cyber security roles. A lot of sitting around punctuated by sudden urgent work. I know a guy who repairs offshore wind turbines and he plays xbox all day then occasionally jumps in a helicopter and rides to the rescue. It would be a great job to do alongside another role, but if they company has chosen to pay you to be present in between assignments then they are very much paying you not to do that instead of just having you on call at a cheaper rate. It would be legitimate for them to contractually require you to give them what they paid for, and enforce.
I think it comes down to, are you providing what you are actually being paid for - in the first case pristine inventions, in the final case literally your time.
The other side of this is - in engineering we are trusted to tell the employer how much work we are able to do in a period. At sprint planning I tell my team I can get these 3 tasks done this week and that goes unchallenged.
You could say that it is legitimate for employees to quote less than a full weeks work to their first job to leave room for some work from their second job, because if they aren't getting enough work done they will be fired.
Honestly that assumes a much more aggressive, KPI driven environment than most of us are lucky enough to work in. Would you like to work for a company where your productivity is measured according to some arbitrary KPI like "lines of code" or "supervisor assigned work volume points" or "team agreed scrum points"* and if you aren't in the top 2/3rds in a quarter you get fired? This is normal in sales but generally not in our comfy software roles. Be careful what you wish for.
* A lot of places do stack ranking but it is about getting rid of the negative outliers. Stack ranking to force average performance would be a lot worse.