I went through hiring several times at several companies, being on the interviewer side.
Typically it's not the talent pool as much as what the company has to offer and how much they're willing to pay. I referred top notch engineer friends, and they never made it past HR. A couple were rejected without interview because they asked too high of a salary, despite asking under market average. The rest didn't pass HR on personnality or not having all the "requirements", because the really good engineers are socially awkward and demand flexibility and are honest on the résumé/CV, or are self taught and barely have high-school graduation on there (just like me).
I've literally seen the case of: they want to hire another me, but ended up in a situation where: I wouldn't apply for the position myself, and even if I did, I wouldn't make it to the interview stage where I'd talk to myself and hire myself.
Naturally the candidates that did make it to me weren't great. Those are the people that do the bare minimum, have studied every test question (without understanding), vibe code everything, typically on the younger and very junior side. They're very good at passing HR, and very bad at their actual job.
It's not the technology, it's the companies that hire that ultimately steers the market and what people study for. Job requirements are ridiculous, HR hires engineers on personnality like they're shopping for yet another sales associate, now it takes 6 rounds of interviews for an entry level position at a startup. VC startups continue to pay wildly inflated wages to snatch all the top talent while established companies are laying off as much IT staff as possible to maximize profits.
I got asked the same. I simply pointed out the test is a reproduction of last week's bug that took down prod at 2am and got paged to fix, and is therefore as realistic as it gets of what they'll need to be able to handle.
It's always DNS, everyone should know that.