I work in assessment industry and taking candidate snapshots or recording their actions during the assessment, with the candidate's permission, is a very common practice. Platforms like HackerRank, HackerEarth, Codility, etc, all do that.

The problem is, companies were initially comfortable with no such feature to record candidate actions (snapshots/videos), candidates however started cheating in dozens of ways and eventually get rejected when they are shortlisted for the first F2F interview after initial screening. Some candidates can't even explain how they scored well in screening test.

Due to that, companies became insecure and are now asking for features for proctoring the assessment. Things are never one-sided.