I've interviewed tons of engineers that ace the interview and you have no choice but to pass but you see later on writing abysmal code. The problem is that design, quality, and maintainability are not valued. As a result, you end up with extremely mediocre "hacky" engineers at larger companies that can spit out tons of valid code but lead to a tangled mess shortly thereafter.
Worse, there's this huge emphasis on "big O" with zero focus on clearly egregious bad practices (tons of copies, outrageous memory usage, casting between strings and numbers all the time). I've rarely seen clearly bad algorithms be deployed but I have seen plenty of unperformant code go out.
I myself too have witnessed a similar thing but with not-so-algorithmic-people. I think it all comes down to the company culture and the person actually being able to let go of their ego and improve their programming skills. It is similar to a senior developer who never learned to properly program and because of hir position is incapable of seeing faults in their code. Once you've gotten too accustomed to shitty code, it's hard to change your style which is understandable.
Probably biggest influence on this I think is the culture, if nobody tells you that your code is shit (in a kind way) you'll never learn better. But then again, some people are so hard-headed and full of themselves that they get defensive and never actually admit their faults. Though giving and receiving feedback is not easy, can give you an identity crisis once you realize you've been doing something wrong for years.
And then you have a bunch of Ivy League graduates who have spent years learning algorithms and are burning to use them but there's no actual problems that really need them.
I had a coding test once where I was given someone else's code with an introduced bug, and I had to fix the bug. To do so, you were basically documenting the code along the way as you traced your way through possible trouble spots. It felt far more meaningful than the typical "implement some list traversal algorithm that you won't actually ever use at this job."
I've had a similar interview and although I did not solve the bug, I think the interview was much more effective than most algorithm based interviews. Not only did my interviewers get to see how I navigate a codebase and use my IDE/other tools, they also saw how I approached known unknowns and discovered information.
Worse, there's this huge emphasis on "big O" with zero focus on clearly egregious bad practices (tons of copies, outrageous memory usage, casting between strings and numbers all the time). I've rarely seen clearly bad algorithms be deployed but I have seen plenty of unperformant code go out.