Here's the best approach I've seen yet to the take home interview (and interviewing software engineering candidates in general).

Here's a git repo, a problem statement and a slack channel to ask questions. You can use any tools you like and spend as much time as you like on the project for the next week.

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Employer's perspective: You get to see some code, see how they approach a problem, see how they use their tools, and get a sense for what it's like to work with them.

Candidates's Perspective: You get to use the tools you're already comfortable with, you can set your own pace, and you get a sense of what it's like to work with the team.