I was once on the other side. The hiring manager told me to design an open-ended take-home exercise for potential candidates. The exercise was to be flexible: you can take an hour to complete the bare minimum, or you can easily take many hours in an attempt to reach perfection.

I was so preoccupied in designing the test that I did not stop to think whether we should. In hindsight, it wasn't a good idea because of how open-ended it was: some candidates, we later learned, spent at least 20 hours on it.