Nope, not true. I’ve been contracting for 15 years and regularly encounter leetcode interviews.
When I can, I’ll outright ask if the client intends to do this kind of interview. If they say yes, I’ll explain my objection to the process and if they aren’t willing to modify their interview approach for me I will decline the interview.
I have on occasion had this sprung on my without warning halfway through an interview and I’ve declined to do it; most of the time I get hired anyway.
Whenever I can I try to convince hiring managers (and I’ve been one myself) to ditch leetcode nonsense for future interviews.