> self-selects for people who already are unemployed then

You can say that about all forms of hiring process. If you're unemployed, you obviously have more time: to spend more time on the take-home assignments (which I hate, see another thread [1]), to add more stuff to your GitHub profile, to go to more interviews, etc.

[1] https://news.ycombinator.com/item?id=40200397

> You can say that about all forms of hiring process

Yes, but there's a significant difference between spending a few hours on a take-home assignment and dropping your current employment to spend 4 weeks potentially in another city working full time.