In this specific case, that is not what is happening. Rather than assessing candidates on some arbitrary algorithms question (which people are constantly complaining about), they are giving them a real problem the team is currently tackling. It's your time to shine and show how well you work as an engineer on real problems. I'm baffled that companies have finally heard the non-stop complaints about algorithms questions and are treated to new complaints about not being compensated for time spent interviewing. What an amazing time to be alive
"What an amazing time to be alive"
My assumption would be that if a candidate's code is good enough to get released, then the candidate is, by definition, good enough for the company.
I also assume that most of the time spent in this "interview" in a live codebase is the employee asking about how the candidate thinks and decides on things, not for the pair to actually produce working code.
I also assume that the code used within the codebase is non-business-critical stuff like an internal tool.