They are asking the interviewee to complete the same task as done by an existing staff member, and compare the results, how is that "free labour"?

I'm not sure where I stand on this sort of thing to be honest, my only experience of anything similar was a pre-interview task to implement a simple 10 entry LRU cache, and after getting the job I was told the only reason it was there was to weed out time wasters with next to zero skill being sent by the recruitment company.