A good employer takes care of their worker even if they have problems, but they also want to weed out as much of them before hiring. The value of worker is not revealed when they are at their best. Fragile workers with anxiety perform well only small amount of time.
Live interviews are generally excellent at revealing how individuals perform when placed outside their comfort zone. If you perform well in a live interview, be it for coding or any other skill, you are likely to perform even better reality.