I talked for nearly an hour about one of my projects, first of all the broad design, then various interesting aspects of the implementation. (Most projects have lots of "dull"/"boring" code, but I certainly highlighted the areas I had the most fun/pleasure/difficulty implementing.)
Was a nice interview, although it was only possible because I've posted a whole bunch of projects online. I know other people keep their stuff private, or don't even write code in their spare times.
Also, my side project code is garbage, because only I am going to look at it, and so it only needs to make sense to me (and maybe, future me), and it's more fun to write awful things.
I'm sure this gets you good insights on some candidates, and probably is pretty decent for fresh grads (who should have something from school), but I can't imagine it working well for a lot of experienced candidates.
However, if I see someone engaging in an issue or PR discussion in a way that would make me nervous about having that person in my team’s slack channel, I am much more likely to pass on them.
I got a ton of useful experience doing open source that aided me in my day job. Experience building abstractions and DSLs, building frameworks, and testing stuff really effectively are all examples.
There's a kind of common thread with all of these things in that in my day job I didn't really practice and hone my skills in these areas because of the constant churn of work that the business wanted done. The incentive structure of corporate development encourages a kind of frantic slap-dash "just get it good enough and get it out there" approach while open source is much more relaxed and pensive and thoughtful and elegance is valued much more highly (sometimes too much).
There is valuable experience to be gained from both environments - I wouldn't say either one is really ideal. Open source, for instance, doesn't put the same emphasis on customer feedback that business does and often takes too long to develop new stuff.
The more useful signal for me is GitHub as a portfolio piece, if they got some concrete relevant work done that I can ask them about in the interview but I don't need to see the source code for that.