Disagree that the knowledge required to do well at leetcode is not useful for some business problems. FAANG most definitely has products/projects that need that specialized ds/algo knowledge, which is something most people learn in CS formal education.

Off the top of my head, React uses lots of graphs and trees to render stuff.

All you need to know is that this stuff exists, and when / why it would be appropriate to use it.

Also there is almost never a reason to implement such things yourself—even when you need the algos—as there are libs for that! (Imho one of the biggest signs of incompetence is when someone starts to reinvent the wheel! That's an absolute no-go. And the truth is: If you're not in academia doing research all the wheels you ever need are already invented).

A valid test for a candidate would be whether he/she is able to google for an algo and pick the correct code form the results.

Such a test would be good enough as a lot of bad candidates would fail as they wouldn't google but start to "solve" things on their own; the other bad ones wouldn't be able to pick the right solution at all—because they don't know what they should look for in the end.