That's only if you're expecting a candidate to provide a perfect solution; and don't make it clear that the time limit should inform their design and not just measure their speed of implementation.

Part of software development is tailoring a solution to the scope of the problem, and this includes taking into account the time and effort available to come up with a solution. Someone who looks at that problem statement and designs something that will take a week has missed a very important requirement.

You could reasonably scale up any problem to take an arbitrarily long amount of time, by adding onerous requirements (must have 7 9's of reliability). What I've found more rare and precious is the developer who can limit the scope so that items that are not up for negotiation like time (2 hours) & resources (1 developer) are respected.

I fully expect a developer to state their assumptions up front, so that I can judge their design based on the stated assumptions and not some unstated imaginary assumptions. It also lets me see how or if they prioritize.

I completely agree. I saw that and thought - um, that's not a 2 hour job unless you want a massively hacked together app. I might be able to do something modestly decent over a weekend, but 2 hours? Nope. You have to have ways of inputting/verifying data, tagging genres, etc. I've done a lot of similar code but that's why I know it's basic, but not quick. It would let me know that the job wasn't going to last because of the lack of knowledge in estimating software development.