It happens in part because large, very successful organizations adopt it and then it spreads as a cultural practice. Microsoft (way back) and Google (back, but less way) were infamous for this. It'd be like if you heard at F1 teams, mechanics have to disassemble and reassemble a vintage carburetor blindfolded and decided to try it with your applicants.
There are also lots and lots of places, large and small, who never adopted that sort of nonsense.
There are also lots and lots of places, large and small, who never adopted that sort of nonsense.