I'm of the opinion that this is fair enough as long as the pay isn't crazy high. The truth is, no interview is ever truly fair, and all interviews can be gamed.

I'm of the opinion that this is fair enough as long as the pay isn't crazy high. The truth is, no interview is ever truly fair, and all interviews can be gamed. "Grinding leetcode" is much the same problem you are describing wrt spending 40 hours on a 2 hour project. People game non-technical interviews too. And resumes. It sucks, but you only need to be better perceived than the next best competitor. Most folks don't have 40 hours to spend on a 2 hour max coding challenge. Hopefully the ones that do are already employed and not currently competing with you, or are so inexperienced that 40 hours produces horrific over-engineered abominations instead of clean efficient readable code.