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I hadn't heard these were very common. Perhaps it's a regional thing. I don't really understand what the value could be of doing that. You want to hire people who relate to people in real time, so putting them in an artificially awkward situation doesn't seem like it would tell me anything I'd want to know.
I've seen this a lot too. It seems to be especially popular in the sales industry. Is that because there's so much hiring and turnover? I'm not sure, but I agree, it's not a good way at all to get a good first impression from a candidate. I freeze up in those interviews too