If the challenge feels like "silly homework" then something is clearly wrong, but completing challenges during an application process if very, very necessary.
I've been in a couple of "hiring manager" roles and many times the challenge completely exposed under par developers with otherwise interesting cv's. Sloppy code, beginner mistakes etc. It's maybe a sign of the times where hiring managers need to actively test whether someone is propping up their CV with stuff or is actually knowledgeable. I wish it were different, but alas it is not.
It's not the recruiters, they are just the messenger. But yeah this is a joke.