The challenges are designed for an average engineer at the job opening level (junior, mid, senior) to solve in approximately 10 minutes. Furthermore, they are practical day-to-day tasks that should not put pressure just by nature of what's being asked.
For your last point, a review takes on average 5 minutes for a hiring manager. And I think screening more is not inherently a problem. Imagine they turned down the dial on their CV filters and had more applicants do a technical screen - wouldn't that give more applicants an opportunity to shine? In most cases it unfortunately is a numbers game.
You're literally making the argument for why the problematic scenario the person you are responding to will occur. It costs nothing to waste the candidates time with this tool, so people will "turn down the dial" and do that.
They'll keep running screenings after they've got someone they're almost sure they are going to hire, because if the deal falls through its better to have candidates in the pipeline.
They'll run screenings before they bother to evaluate if they're even interested in a candidates skill set, because you've made it cheaper to filter out candidates for lack of technical skills than lack of job fit. (And no forcing them to meet the candidate once before running this tool will not change the fact that they will do this)
And so on and so forth. Which is ironically why using this tool would filter the best candidates from the hiring pipeline while simultaneously making life worse for everyone who isn't one of the best candidates and who does have to put up with many companies wasting their time to get a single job offer.
And is that not how hiring works today, or are we pretending that hiring processes are completely fair and non-biased?
How many companies still ask for take-home exercises?
So in summary, there is actually no pressure that would need resolving, and time being wasted by applicants is a good thing?