This! I've done more than one code challenge in my time that was secretly testing for how far you get on a task that is underbudgeted on time. Your best applicants are going to spend too much of their own (unpaid) time finishing it and be annoyed at you before you tell them how clever you are for testing their ability to prioritize...or they're just going to not bother.
Far too many companies forget that they are also being tested and interviewed. The sort of stupid "let's secretly test whether the candidate can figure out we're screwing with them" kind of thing lets good candidates know one thing: the company is toxic and won't treat them like a human. This is the exact sort of behavior to run away from.
