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and yet, still used

They're using the idea of the polygraph, the actual measurements could mean anything. It's the "conversation" during and after the test that counts.

Of course it's also a great medium to screw someone over, but that's a whole other thing.

Yap it is just an interrogation. However, knowing about how the polygraph is ineffective and letting the administrator know will often result in 'FAILURE'. They will specifically ask questions related to polygraph terminology (lingo, abbreviations) to see if you are familiar.

It effectively lets through psychopaths, very good liar or those that know how polygraphs work and presumably practiced passing it.

In most countries polygraph tests are inadmissible in court.

They are typically used in criminal investigations as a way to make suspects feel uneasy so investigators can pick up visual tells.

The example here is somebody who apparently needs to take one to access some confidential information - and clearly they take a pass/fail seriously, so it seems some (presumably US?) government agencies do take it seriously enough to make passing one a security requirement.

Good point. A quick Google search doesn't seem to bring up any laws that prevent employers from using polygraph results in determining whether to hire or fire someone.

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