But I totally agree with your point. I think that if a take-home project goes over a couple hours it should be paid. Some companies do this, but not enough.
That may or may not be a good thing, depending on the situation. But the downside is that the company would lose out on the potential applicants who can demonstrate skill in interviews, are in high demand, and can't be bothered to spend time on take homes.
Like actual day-to-day work, just give me a prompt and a recommended time limit and I'll try to fit it to that and I might go above and beyond depending on a number of factors.
It's a situation where you have to pick your poison as an interviewee. Either subject yourself to the stress and lack of meaning that is leetcode (just my perspective), or be prepared to waste a few hours of your life on a project that doesn't wow your potential employer. I'd rather take the latter and hope I can learn something valuable along the way.
People apply for dozens of jobs, if they had to spend 10 hours on a take home project each, it would add up to hundreds of total hours working on pointless toy projects just for the chance to get a job. That's like working full time for a month or two. Not counting the time spent to get up to that point (finding open job listings, editing resume, submitting application, doing screening interviews, etc.)