You're stating that the company doesn't lose out with false negatives. That's certainly true with big FAANG companies. But I suppose in my original comment, and when I brought up Goodhart's law in a descendent comment, also suggests that by creating a system that can be gamed by prep, you end up creating a situation that encourages false positives. In the end, is a company of Leetcoder elites and new CS grads going to be a more productive company than one comprised of experienced and capable engineers who don't happen to do as well on those tests? Which I suppose is the question for a different study.