We're going to disagree on this, but I have had situations arise at least once every 6 months where someone at work, or I, had to decompose a problem or come up with some critical code in exactly the same way as a LC interview.
There is something very frustrating about living this experience and being surrounded by folks who refuse to admit it is real. Those same folks who couldn't help in those times.
It's fine, it's not always required for every job, but I sure as heck would appreciate working with folks who can describe set cover or what have you. I work where I work though. So, it's different all over. But to unilaterally say it's invalid is just plain wrong.
In what situation would you be decomposing a problem or coming up with critical code in the same way as a leetcode interview? Are you saying you have had to come up with solutions without access to additional resources like the internet?
Math, which is more than arithmetic, is still important in the age of calculators.
Using a tool does not substitute for clear thinking and deep experience, which is what they're trying to test for.