>The businesses that use coding exams have the second-rate (and lower) developers writing code.
So FAANG has second-rate developers?
I would say the opposite anywhere that does not test has second-rate developers as they let anyone who can talk the talk in.
E.g. I have seen senior 5+ years tenured engineers at non-FAANG companies with weak coding tests, write O(N^2) code in production; then I took a look at it and reduce it to O(N) and N was not small it was pushing 50,000 and was only expected to grow...
There are plenty of companies at which the senior engineering talent would very easily be outperformed by new graduates at FAANG. So calling their references to ask what their title was does nothing to verify their technical abilities.
Source: I am FAANG ATM and the new grads I work with outperform 10+ year tenured engineers at other companies I have worked at.
The vast majority of places are asking algorithmic questions not for you to reimplement known algorithms, asking candidates to regurgitate existing algorithms is widely known as bad practice.