1) This isn’t unique to FB.
2) The kind of interview being described has been critiqued by many people, many times on HN itself (I am definitely one of those). The problem is that there are no good alternatives. One suggested alternative, take home exercises, became a mess because a lot of companies, and individuals at companies, started treating them as free labor. Beyond that, they need to be more complex to the point that an interviewee is doing actual work.
3) The best way to look at these interviews for senior engineers is them testing your ability to learn something “new” at a very fundamental level. It’s the equivalent of them selecting people based on their success in a badminton tournament. You will most likely need to pick up the game and it doesn’t have much to do with your day to day job, but it does say a lot about your ability to pick up new skills/tech ologies. The difference is that these interviews, unlike a game of badminton, actually have something to do with your job.
To be honest, it’s not ideal, and I particularly hate it because I find it hard to find time to study and prepare when I have a family that I don’t want to neglect, and also a full time job that i would find immoral to take time away from. But it’s simultaneously hard to find better alternatives.