I work at a "big 4" company that's also known for having difficult algorithms questions and I can confirm that sub-par developers still pass through. After talking to a lot of my friends in the industry, my theory is that most devs these days are basically just using sites like leetcode to train and memorize implementations of algorithms which end up being the same questions used by interviewers that use leetcode as a question bank.

I'm not against this type of training, I'm very familiar with and have competed in ACM ICPC, TopCoder, etc, but what I've noticed is that there seems to be a divide in the type of devs that are merely brute forcing and solving as many questions as possible in order to create their own solutions bank vs the ones who take a more structured approach of learning problem solving paradigms and algorithms/data structures in a way that enforces why they're used in the situations they are and how those can be adapted and composed to solve larger problems.

If you want horror stories... I've worked with a dev that didn't understand the concept of passing by value vs by reference. This was a person being paid 6 figures and has been writing code for cloud infrastructure with a fundamental misunderstanding of the underlying memory model. I've also had devs that didn't even know that an abstract data type like a map could be implemented with either a hash table or self balancing search tree and therefore no idea of when you should/can/can't use one or the other. This type of thing wouldn't really bother me if I was talking to a front end dev, since I imagine most of what they do is solve design problems, but it's very worrying when these are people working on the lowest layer of a public cloud infrastructure...