This might be the worst technical assessment format I've ever heard of. I really don't get the reason for adding time pressure to this. You're combining the worst elements of take-home assignments and whiteboard interviews.

Why not send people the assignment and ask them to return it within a couple of days? What are you gaining by limiting it to hours and turning it into a remote exam?

This way it ensures you only spend 2 hours on it without being penalized. If you are free to spend any amount of time you can be sure someone spent 40 hours working on it, you really don't want to compete with that. So another person would say that this combines the best from take home and white board, you don't have to travel anywhere for the interview, you get to do a project rather than algorithm, and it doesn't waste a lot of your time.

A 2-hour project is hardly a project. It's still a contrived problem with limited scope. I don't see it as an improvement. And you're assuming that the person who is assigning the task can estimate it correctly (this goes back to the topic of the OP).

I suppose people's preferences vary a lot. Personally, I would turn this down. The format of "do as much work alone under pressure" is extremely offputting. I'd much rather do a whiteboard interview where the problem is well scoped in time and I can discuss my solution with the interviewers. I also wouldn't mind a take-home that actually takes 2 hours that I can do whenever I please - but asking for the work to be returned within hours is a dealbreaker for me.

…but they said they schedule the 2 hours for whenever you please, so the only thing being limited on here is it being an honest “2 hour project” rather than a “10 hour project that we expect you to lie about.” You still get to do it whenever you please.

I don't know what kind of assignments you think we give people, but they are things that anyone who can program can do without any thought well under an hour. Whole idea is to weed out people who don't know how to program or don't know how to write unittests or any kind of documentation.

If you are having time pressure challenges with our assignments we also don't want you.

As a potential employee I would never agree to this. If you want me to put in two hours, I do expect to have progressed further into the interview than "you are one of 400 candidates, here's your test!".

Experience shows that many people straight up lie about their programming skills to a point where they can't write a FizzBuzz to safe their lives.

But also if the person is so unwilling to co-operate that they can't so basic programming skill then I guess it wasn't meant to be.