Just to confirm, you meant just register -> store to database + forgot password and validation right? (Greater than 8 hour time commitment do sound about right, but I'm just curious to make sure I read it correctly).
So yes, I would assume that includes things like full email validation round-trip too.
Even just slopping together an in-memory, no-email-sent deployed solution is at least 3 or 4 hours in my book, which seems way excessive for a pre-screening question!
Depending upon whether or not you can use pre-existing frameworks/libraries they are either asking you to: 1) do something which takes so much work that it is completely unreasonable as a prescreen (which will filter out good programmers, who won't deal with that shit), or 2) they are asking you to basically edit some templates on top of some off-the-shelf solution (which will not filter out bad programmers).
Coding to even talk to someone is a terrible idea.