Yeah, I think that if a hiring manager or human resources person is grading people on whether or not somebody codes in their free time, that’s extremely problematic. (It also ruins the heuristic when this is done, because people start to think that doing side-projects in their free time is a career builder.)
As a regular person who writes code, when I decide how seriously to take somebody’s ideas about a technical domain I don’t know much about, determining whether or not the person is sufficiently curious is very important. Having whatever proxies are used to determine this never be directly rewarded by businesses is therefore extremely important. Whatever behavior is rewarded by businesses in an over-compensated field like ours becomes almost immediately worthless for both the business and everything else.
(If doing side-projects in order to attract HR attention becomes widespread enough that you can’t identify the career-building intent from the number of buzzwords in the description, I’ll need to determine how seriously to take someone based on how many side projects they have that would actually lower their likelihood of getting hired.)