Either way, the candidates who pass coding interviews meet the minimum hiring bar.
And don't forget the historical context when Microsoft popularized brain teasers and algorithmic puzzles in its haydays. In the 80s and 90s, there were few interview prep books. There was no leetcode or any other pre site. Those so called teasers are cleverly disguised math puzzles. Remember the questions about pirates dividing up gold coins? Classic math problem. Remember the one that asks how many unfaithful husbands there are in an island? Putnam question solvable by mathematical induction. Similarly, the so-called algorithmic puzzles came from classic CS books or from real projects. Those who can solve the puzzles are either super smart or super geeky. Either way, they were likely to be great hires for Microsoft.