Programming contests aren't anything like actually working at a software company. If you select for the wrong skills, you'll lose lots of good people.
It's undeniable that open source is mainly white dudes. There are plenty of women who will tell you that they don't feel welcome in open source, and so don't participate or have stopped participating. So if you use open source participation as a hiring filter, it will have a bias.
Personal projects are a sign of having time and money. That is also correlated with being a single white guy. Parents, and particularly single parents mostly just laugh when you talk about free time. Making humans from scratch is their personal project.
That's not to say that these aren't good things to look for. I look for them myself. But if you use them as a filter (as opposed to one of many positive signals), then you definitely are biasing your hiring to middle- and upper-class white males.
On the flip side, even if personal projects don't matter for hiring, everyone interested in the industry should be pursuing personal projects, even if it takes buying garbage computers (as I did as a kid) and repairing them to get a learning platform. Personal projects and open source are more accessible than people might think.