It’s a way to filter out people who haven’t had time to study leetcode style quiz questions. It has no relationship to learning skills or innate ability. There is no way to distinguish between someone who hasn’t spent time grinding algorithms and someone who had with poor learning skills.
>I would argue that being able to study leetcode and then apply that new knowledge you've learned is an important skill in and of itself in this industry. Isn't that what all of highschool and most of college is?
Nope, it demonstrates that you had time to waste, nothing more. Candidates that built actual software to accomplish something are much more impressive because it shows they can write software attached to reality.