[throwawaymath]

> One person when asked the 2nd type of question brought out their mobile phone and showed us how they could control their entire home with an open source automation system and a homemade app they made themselves.

They were hired and they were very good.

They would have been an equally capable hire if they did not have the time or inclination to complete that project. Moreover you can acquire all the skills a capable software engineer has without having personal projects. That means this is a poor heuristic for hiring criteria and candidate assessment.