I've been there. I think the idea is to look for people who can "solve problems" and can use the right algorithm for the right problem. In the end, it seems that candidates just spend a lot of time practicing algorithm problems in online competitions to get good at the questions so that they can recognize the base problem in interview questions and implement answers really quickly. Just because you've been spending hours doing online competitions and remember algorithms really quickly doesn't make you a good engineer in my book. Especially when you will probably forget all of them the second you get your job and stop practicing.

I can't blame other people for studying for tests, I can just blame the tests.