At my current company, the security positions are focuses like that and actually test people, the Dev interviews are two leetcode questions and a conversation to make sure you arn't a complete dunce. I havn't met a single dumb person on the other side of the fence, but I have met alot of dumb devs here.
Project-based learning can't be managed with 40:1 student teacher ratios. The best learning has always come from projects and apprenticeship/mentorship style systems, but even managing that with 3 classes with a 10:1 student teacher ratio becomes hard. This should make sense, almost all the economic evidence is that parent characteristics are hands down the largest factors in what a kid's future income will be (mentorship).
Cheating is rampant which is why take-home exams rarely exist.
The reality is the world would be far better off with 3 times as many teacher, but you can't keep teachers wages as high as they are with 3 times the supply.
I usually learned the most out of take-home exams. You’d usually need to study and brush up on things, but then having a week to thoroughly work out everything was always a great learning experience. It is a way of the professor saying “you should know this and if not, know how to figure it out”. It was an actually good test of your knowledge and skill and didn’t rely on being able to spit something out in one or two hours in a stressful environment.
I think you’re right that no adult experiences moments like you get in school exams. Almost never are you required to know some relatively arbitrary thing or solve some problem within an hour or teo. There are crunches and moments of needing to fix something quickly and important presentations, but in every case you are presented with something you already know about or have day to day experience with. And failure is usually not some drastic adjustment of your future. If the professor is not good, which is the norm, then exams are a bit of a toss up.