"Problem the 1st: how do you verify the example project is actually the candidate's own work?"
Have them discuss the code in depth. Architectural and design decisions, coding conventions, alternate approaches they rejected, etc. Pretty hard to fake this if they didn't write the code.
"Problem the 3rd: evaluating a large, unfamiliar codebase is actually really hard."
Good chance to assess the candidate's ability to document. :)
More seriously, though, this is again an opportunity for the candidate to walk you through the code.
No it reduces the cost to the employee, with no additional cost to the company. At least in $ or time terms. Sure ... a senior developer interviewer may need to fire up a few extra neurons.
Have them discuss the code in depth. Architectural and design decisions, coding conventions, alternate approaches they rejected, etc. Pretty hard to fake this if they didn't write the code.
"Problem the 3rd: evaluating a large, unfamiliar codebase is actually really hard."
Good chance to assess the candidate's ability to document. :)
More seriously, though, this is again an opportunity for the candidate to walk you through the code.