I agree with this, but with the caveat that it's extremely rare to come up with a truly novel algorithm in a production environment. Those almost always come out of academia or R&D departments.
So is it important that people remember how to implement algorithms from scratch? Or is it important that they know when to identify when an existing algorithm would be useful?
For instance, if I see that something is suspiciously like a Stable Marriage Problem, do I need to remember how to implement the Gale–Shapley algorithm? Or is just the ability to recognize the problem as something that has a particular solution 90% of the way there? I would argue yes.
That said, I'm not sure how to test this is an interview setting.