Signalling is an important thing, it's why you iron your shirt before the interview - it may even be why you have a degree. The cost of false positives is high, so if this filters out skilled engineers who think are appeasing the interviewer's ego, the system is working.
This is a skill, learning to sell yourself. It translates into being able to get sell innovative projects to stakeholders, to learning new things, to understanding business requirements.
Maybe I’m wrong, but I’d love to hear why or how.
Why should I do algorithm or math related tasks as a frontend developer for example. Soft skills are way more important than preparing for potential interview questions.
You say this as if it's a bad thing.
The reality is, companies have multiple qualified applicants for each open role. Hiring teams are actively raising the bar and trying to find more ways to narrow the pool down. If there are 10-20 qualified applicants in the pipeline, and half of them interviewed terribly, it's very easy to cut the applicant pool in half by rejecting the people who couldn't communicate their experience clearly during the interview.
Remember, "interviewing skill" is just another way of saying "how good are you at communicating with prospective employers".
Communication is usually an important hiring criteria. Ability to communicate well in an interview ("good interviewing skills") is a good proxy for ability to communicate in general.