"Work for contract for other employers" could literally mean I can't help my neighbor mow his lawn in exchange for a beer. In this case what it really means is a non-trivial amount of work done for meaningful profit.
If I fix a friends computer in exchange for a nice meal, I am using my relevant skills to perform work, but I'm not actually violating a contract forbidding outside work in a way that could ever possibly result in damages or firing for cause.
For a potential employee to be so rule-stricken as to concern themselves with performing a coding interview, that would be the potential red flag for me. So this could actually be another positive outcome of this approach.