The proposed solution to me, is much worse.
> Ask them to build something – anything!
> Instead of a coding challenge, ask them to spend a short time building something they enjoy, and talk about what they did and why.
To me this would be a MUCH more difficult task. A blank canvas is much harder to work with, and downright frightening. Constraints foster creativity.
Having everyone code the same thing helps the interviewer (who is also very busy and has many other things happening in their work life) gauge the different levels of the people applying easily by comparing them on the same task.