Pretend I was hiring a restaurant chef and the industry standard test was "run a mile in 4 minutes", a test that 98% of all candidates fail!
So professional chefs practice by jogging daily so they could prove themselves during the famous "run a 4 minute mile" weeding test so they can be hired to prepare meals for people.
That's what we're talking about here. I've had to write out the mathematical proof of various algo complexities of B* trees exactly 0 times when writing SDKs for some CRUD application but that's what's expected during the interview.
It's as correlated with the ability to do the job about as much as running a 4 minute mile in that younger, more desperate, easier to control, and thus cheaper people can do it better. That's what the actual filter is for - to find candidates that are easier to abuse and take advantage of - smart enough to do the work and foolish enough to take the job.
I've hired large teams at multiple companies where such tests were used and that was exactly why we did it. We didn't want the experienced 45 year old wanting to work 40 hours with vacation, we wanted the foolish 25 year old that gave us their weekend.
Actually saying that is illegal, but using a stupid test that selects for it is not.
Hiring professional chefs is actually a great parallel. "Chop an onion" or "make a french omelette" are basic tests that even the most experienced chefs being hired for top positions will have to go through.
"But this isn't relevant to my job, a subordinate will always do this kind of stuff."
"We are a fine dining dinner restaurant, I'll never need to make an omelette."
Doesn't matter, make a damn omelette. If you can't, you aren't suited to be a head chef, or any other kind of chef.
Knowing basic data structures and algorithms and having problem solving skills is absolutely critical to a software engineering job. In fact it is the entire job.
And even that isn't really true. Rarely people will have to work with anything but the most basic usually language builtin data structures. Usually people glue together a few libraries and build some CRUD.
I'm sure I can do great in any coding challenge that actually test for problem solving and not esoteric algorithms knowledge. And when you stumble on the latter , it's hard to muster any motivation for the place. It's like applying for a driver position and they ask to verify how quickly you can change a tire (below 5 minutes is a must).
"I want to work for your company"
"Ok, prove yourself"
"Sorry, I don't have time"
How do you expect that conversation to go from there? If you don't have time then make time. It isn't anyone's problem but your own.