why is that signal on how well they'll perform at the job? If someone doesn't code for fun but is a great programmer you don't want to hire them? Why is that considered acceptable?
You parsed it incorrectly. It is the other way, in fact.
Several times, people do very interesting personal projects, but fail to perform at the same level at work. That gives a clue that it may have been an unsuitable work environment that impeded their performance. It could also be a difference pertaining to their orientation to structured vs. unstructured working conditions. It could be related to explicit objectives with tight deadlines vs. exploratory development with open deadlines. And, more.
Knowing what my work environment is, I usually could understand their medium-to-long term fitness.
So, if you have a candidate that thrives at fun projects but not at work you put them to the next round, because you think your work environment is sufficiently different to make them thrive at work instead of their fun project?
The fact that someone builds something of their own volition is an excellent marker of initiative, of breadth. If there is a choice of potential hires, this signal factors in.
Several times, people do very interesting personal projects, but fail to perform at the same level at work. That gives a clue that it may have been an unsuitable work environment that impeded their performance. It could also be a difference pertaining to their orientation to structured vs. unstructured working conditions. It could be related to explicit objectives with tight deadlines vs. exploratory development with open deadlines. And, more.
Knowing what my work environment is, I usually could understand their medium-to-long term fitness.
Hope this clarifies what I meant.