There seems to be a clear difference between assessments of an applicant’s ability, on one hand, and the sale/use of their work product, on the other. I’ve gone through lengthy job application cycles as well, which have included completing hypothetical assignments. But that’s entirely different than doing work for someone, ie creating something that that person then profits from, resells, or otherwise takes ownership of. That’s called unjust enrichment and can lead to civil liability. The legal way to do this is to have a 90-day provisional period where an employer can decide not to hire you, and offer you less benefits during that period (though they still have to pay you).