This does have the effect though of filtering out candidates who were lukewarm on the position to begin with (eg they were just throwing applications around en

This does have the effect though of filtering out candidates who were lukewarm on the position to begin with (eg they were just throwing applications around en masse) because now, yes, there is that investment to be made in proceeding with the application. And the coding test tends to become the focus of the rest of the interview process, assuming the company goes forward with it. And good companies will give fairly comprehensive feedback on your submission, so there's that.