I strongly disagree. Leetcode-style exercises are detached from the realities of software engineering, and signal ad-hoc preparation over actual competence and skills.
Just because you do not know how to implement a, say, ray search algorithm with optimal complexity that does not mean you cannot implement a background worker, a card with accessibility, a service which securely handle RESTful requests, etc. So why aren't you excluding everyone who is not a ray search experts from your application process? Do you seek to hire competent software engineers, or do you want to have a room of ray search enthusiasts?