I've brought that culture back in our company. Hasn't failed us yet. Turns out for a CRUD web app you really don't need top hackerrank skills. In my humble opinion, people who excel in algorithmic code interviews want to overcomplicate everything and get burned out super fast with 'real world' tasks.
I'm deeply skeptical of claims that you can't suss out "fakers" like this. For one thing, people who were that good at faking could be making a lot more money leveraging that skill directly rather than trying to sneak into mid-paying software jobs.
I think a far more likely explanation is that lots of interviewers are very bad at interviewing, and that interview anxiety, especially given the kind of shit that gets thrown at you in programming interviews, is a lot worse and more widespread than one usually supposes. Result: interviewers are convinced they're constantly catching "frauds" that they couldn't have caught otherwise, but they're frequently wrong about both those things—that the person was a "fraud"; that the interviewer couldn't have caught actual "frauds" with an ordinary interview.
You are right, it happened once, but that's what probation periods are for, in my opinion. Also I'd add we don't hire a lot, so this approach probably doesn't work for places which are hiring a lot of people regularly.
