If the developers were so hard to find, wouldn't companies adjust their expectations and work with who they can find, instead of having them play Leetcode and other crazy games that have very little to do with day to day realities of work at the company?
When there's a famine, people don't complain that their T-bone steak is medium well done, they eat what little food they can find.
When companies were executing on projects that required workers and couldn’t find them, yes there was a shortage. When companies cancelled several projects and had extra headcount, they let workers go. I suspect in the not so distance future the very same companies laying off workers now will need more of them, and that will be even more difficult than today.
Is it really that bad or companies just mindlessly parroting FAANG interview process? No, you don't really need 5-stage leetcode-style interview to hire your Billy-the-junior-React-guy.
I suspect plenty of devs just can't be bothered with it; they either stay where they are, jump to somewhere they already have an 'in' by personal recommendation, go full time time on a side project or freelance, and maybe just play the interviews for practice.