So your solution is to have people work a second for free with the hope that maybe they'll get a job after a while?
Candidates who did the unpaid version saw the clear value: they invest 3-5 hours once, and potentially cut out 20+ hours of first round interviews, or even all the studying like the OP did.
Nobody that we've tested in the beta complained about a few hours of free "work" - they were actually excited about it.
We don't turn around an use the code the candidate wrote. If you consider the cost to use to write the project AND the cost to have it reviewed N number of times, we'd be overpaying drastically for that feature to be implemented.
Code reviews worth both ways.