Oral exams can also compensate a lot for different types of exam anxiety. Blanking on individual points doesn't matter as much, the examiner will help you along or ask along a different path. Doesn't help for someone that completely shuts down, but it's much easier to determine if a student was just stuck on some minor point and actually knows the topic in an oral exam.

They are likely prone to more biases than written exams, and the variability among examiners is likely high. My experience is both in taking these exams myself, and also sitting in on them as the note taker many times. Though that was only with one specific professor, and almost always on the same course. But that was in my experience a very fair exam, even for those students that were very noticeably nervous.