Time pressure, foreign environments, and people watching/judging your work are all exactly the things that happen when you're developing stuff that hasn't been done. You run into problems. You find out that requirements or an API spec weren't perfectly written and have to deal with change. You have to work with other people, and they will judge you.

Hard coding exercises with a time limit that have an answer that can't be found on Stack Overflow do a pretty good job of simulating real world job pressures in a controlled environment so they can fairly rank order candidates.

The technical interviewers that might be biased against you are either the exact people that will have to work with you, or at least they fit in the same company. If they don't like you during the hiring interview, they won't like working with you.

Alphabet's market cap is literally a trillion dollars, so I'd love to hear about how they should stop limiting themselves and start hiring people that can't finish an ill-defined task with a deadline looming and other people waiting for you to finish your module.