Live oral exams can be an effective method of assessment. They can also be confounded by the testee's charisma. (See: any discussion of programming interviews, which are live oral exams.[1])

They do have the advantage of degrading fairly gracefully from in-person examination to remote examination.

They're also tremendously expensive compared to a test given en masse.

[1] Oral exams in a school setting would feel much fairer to people than programming interviews do, mainly because you know what to expect on an exam in a class you just took.