They'd check their network for a seed engineer who can recognize talented people by talking to them.

To put the whole concern in a nutshell: If AI was good enough to fool a seasoned engineer in an interview, that engineer would already be using the AI themselves for work and not need to hire an actual body.

Not exactly because AI can excel at rote Leetcode problems by being dismal at actual work. This is in fact exactly the state of today's LLMs.