Back in 2015 Peter Norvig discussed an analysis at Google that suggested doing well at coding contests was a negative indicator of job performance: https://youtu.be/DdmyUZCl75s
Presumably they do well at these sorts of questions, but that doesn't imply the same actual effectiveness.
(Personally I would add that human measures of “job performance” can also be quite subjective.)
Yes, implicitly Google can only measure the job performance of people they actually hire.
And that's fine! A specialized subset of engineers. Maybe that subset is exactly what you need.
I wonder how the stress of the interview process selects out people who understand O-notation and to whom a Trie would make sense if explained to them, vs people who have these concepts fresh in their minds and/or can handle themselves in stressful interview situations.