How many times have you been asked to solve a leetcode-like problem at work? Ever?
And yet you can probably fluently juggle for loops and if statements to your heart's content; and can figure ways to bend them to your will (and to the problems at hand).
Similar goes for algorithms (the things leetcode questions ask about.) You'll probably never encounter the exact toy problems that get asked in an interview. The real world is always messy, you you need to be creative and imaginative. Knowing algorithms helps with that because you've already practiced, and have a head start in knowing what works and what not.
In fact, I am taking a short break from a problem that reduces to graph coloring with 2 colors. [1] If you interview with our team we will absolutely ask LC style algorithmic problems because one will definitely use that knowledge with us, a lot.
The problem is not LC style interviews per se. The problem is not enough companies tailoring their interview to the role they're trying to fill.