I’ve encountered both, significantly more of the “build a mini project for us” variety.

I also dislike those because I’ve already got a full time engineering job and a family and don’t have time to put 4-5 hours each into every 3-hour project the interviewers ask for. But 5 years ago I did.

I’ve concluded there really isn’t a single way to interview that checks all the boxes, and if you’re running the interview process you have to pay the costs somewhere, unfortunately.