Is this speculative or does this actually happen?
As a team leader I'm involved in hiring and I certainly wouldn't treat one applicant any different from another regardless of their previous postings nor experience (except when I'm headhunting someone I've previously worked with). My own experience interviewing has taught me it's easy for people to put stuff down on CVs (eg they might have legitimately worked at Google but through an acquisition rather than hired by; or not even with the team they suggest they have). So I would consider short-cutting part of the interview process in the way you described to be grossly negligent.
I don't dispute that your CV is more likely to get short listed however you can certainly still sell yourself without having FAANG on there.
My general point is that while I don't disagree that having FAANG on your CV will undoubtedly look good, however a good engineer shouldn't have any problems getting awesome jobs with or without FAANG. Thus is the prestige attached to FAANG really equatable in the real world or is it perhaps disproportionately hyped?
Maybe this is just one of those differences between how people are hired in SV (where I haven't worked) and London (where I do work)?
I think it would be pretty rude and unnecessary if you asked a high-level Google employee to do a whiteboard algorithm puzzle, or a take-home assignment where they have to build a little todo list app. Especially if they are a Distinguished Engineer or a Google Fellow. I don't know where the cutoff is exactly, but at a certain point no-one should ask you to do any more coding puzzles. You'll still go through interviews, but they shouldn't need to test your basic programming skills.
To be honest, judging from your last post I suspect our opinions aren't that far apart. :)
In Silicon Valley, everyone knows that it is fake prestige and the fact that you worked for a FAANG doesn't really mean anything. I both know excellent and mediocre candidates coming out of FAANGs. It literally carry no information besides the fact that you are probably more attracted to prestige.
A few years ago I was contacted by a Google recruiter, but I realized that it was going to be a very junior SRE role, so I wasn't interested in that. I could have put Google on my resume, but that probably wouldn't have been very impressive.
It still makes sense to work at one of these places that pay twice as much as everyone else.
It is simple offer and demand. The supposed prestige of FAANGs also mean that more people wants to get in and unless they really want you, they would be stupid to overpay you.
I strongly disagree, and I'm not sure why you would say that. I've heard that working at Google is a golden stamp on your resume, and you will be able to easily get a job at any other company. You'll probably even be able to skip the coding challenges in any future interviews.