Heyo. From time to time I do interviews at my employer which involve having someone hack on our code base, pair-programming style, for around an hour-ish.

But the work isn't free. Sure, the company isn't paying you, but the company is paying me, and you can bet that we're not getting as much done as we would get done on an interview-free day. I don't think anyone's ever been under the delusion that we're just trying to get cheap labor to build our codebase for us.