This is also an unproven statement with dubious validity.
I come from the trading world where the leetcode equivalent is a brain teaser. After much deliberation, the only thing we could think of for why a brain teaser was useful was that it often proved someone wanted the job so badly that they memorized all the brain teasers. And that type of dedication and drive is what we really wanted.
To me, I don't understand why someone who develops with advanced IDEs, using complex tools and libraries, is in the least bit judged by putting them in front of what is essentially a text editor, and asking them to solve a problem that's of no relevance to their job, using no tools that they're comfortable with