Why? People lie a lot about their skills. The fizzbuzz test was invented a first to filter candidates that said they knew how to code but didn't, and it was very effective at it.
Being able to write software does not automatically imply you are able to write software while on a video call, and while explaining what you are doing constantly.
Sure, they can go right ahead and keep preferring to pass on exceptional people and hire mediocre people instead who will entertain their circus. Sooner or later they'll find out that won't work so well to stay competitive.
