Heck, I passed a harder version of the test (including the theory, I'm a senior/lead/old-fart so I was expected to implement everything on top of the discussions) and I left formal education at 17 :)
They don't have to implement a working version, just give a good outline and be able to answer questions about it :)
For experienced people we go further, and do ask for some coding.
You've got 5 years experience in SQL? Then solve this simple problem which requires using JOINs and aggregates.
You're a javascript expert? Great, then demonstrate that you know the syntax and know what a closure is.
Java expert with a focus on patterns? Then you should be able to implement one of: Singleton/Factory/Command.
We get more people who have 10 years of experience with C# are are self proclaimed experts, but who don't know the difference between the heap and the stack then we do CS students applying for the wrong job.. but that's for a different thread :)