There was a job I applied to that wanted the exact thing I had done at my last job. Same tech tech. Same early startup. Same kind of project. They rejected me without even a phone screen for "someone more in line with their needs".
There's no incentive for them to do a better job.
Most coding challenges are stupid. You'll have a job that's just working on a basic ass API in front of the database, and they'll be like "can you solve the traveling salesman problem?". You don't need to know if I can pull fancy algorithms out of my ass. You need to know if I can cover the basics and take feedback.
Though the last code challenge I had was "can you remove duplicates from this list of integers?". I was like, "can I just convert it to a set?' and they were like "...ok". Didn't get the role, but the pay was bad, it was in office, the company is surprisingly politically conservative, and they're rewriting their codebase "to support AI development". So maybe that sas for the best.