Spacify: "Split on empty, join with spaces." Done.
String.spacify: "Attach that function to String.prototype and call the split/join on `this`." Done.
And so on. It does serve as a way to test if they can actually write code, but my guess is that there's not that big a difference between talking through the code you'd write and actually writing it.
I'd be very comfortable with going through this verbally, but I'd be horrified to get an interview like this where they expect me to type code and talk to them while doing it. I'd honestly much rather have a whiteboard than a laptop—at least I'm used to writing with a pen while someone judges me. The laptop would just take away that comfort and make sure my brain turns off.
Am I alone in that?