Yeah... No, it seems exploitative to me. Let's hack on a FOSS code base, hell make it a library you use!
Or if you want to work on something that is yours, let's reimplement stuff you've done, but let's not take a whole day where I work and I don't get paid. Or ask me to build you features that go live, and I won't get paid and might not get the job...
There are better ways to achieve what the prospective employer is after, without getting me to spend 8 hours building features for your application with a risk that I will get nothing out of it, but you might.
As a candidate what will teach you more about the company, the product and the role - working on the real code base on a real change or working on an OSS project?
It seems at least as likely you'll learn something material as I'd get working code out of you that the lead dev couldn't have written on his own given his better understanding of the problem domain.
Or if you want to work on something that is yours, let's reimplement stuff you've done, but let's not take a whole day where I work and I don't get paid. Or ask me to build you features that go live, and I won't get paid and might not get the job...
There are better ways to achieve what the prospective employer is after, without getting me to spend 8 hours building features for your application with a risk that I will get nothing out of it, but you might.
If that makes sense?