1. Hiring a new employee into an existing team permanently affects the team's dynamic and morale. Bringing in a bad fit can have undesired cascade effects. Bad team members can cause other good team members to leave earlier than intended, for example. You can counteract this by having the entire team interview the candidate, but this doesn't scale for teams larger than, say, three candidates, doesn't work at all for distributed teams and takes their time away from work that needs to get done.
2. Hiring an employee is also a legal risk. Firing people in "protected" classes is touchy and can take a while, for example: https://www.entrepreneur.com/article/62846. You're also opening yourself up to unnecessary lawsuits that just add more of a headache for Legal to deal with...if you have legal. (Early-stage startups typically don't have legal teams.)
3. Hiring engineers is expensive beyond their base salaries. Firing bad engineers can be a huge waste of money.
If you're an early stage startup, you're better off hiring contractors for point work and taking time to find the best hires that you can. Later-stage or profitable companies can afford to not hire "false positives". At worst, a potentially-good candidate you're on the fence about can come back in six or twelve months and try again.