I have saw companies doing social engineering as part of their intrution testing, I imagine fake interviews are (or will become) part of these.

I think it will remain uncommon. I agree it would be a good test, but companies and employees alike get very angry when pentesting gets too close to sensitive subjects.

Anyone who fell for it would not only get in trouble for poor security practice, they would reveal that they were job searching. That opens an entire can of worms that creates problems beyond the pentest. This also angers other employees who see it as a double-trap being sprung on employees.

Another major problem is that responsible employees who accept the fake interview but then use their personal laptop to do the interview will have their personal laptop compromised by the pentesters. Responsible testers will immediately abort, but some will try to use the personal laptop to pivot deeper which is a huge ick. It’s also really bad if the company is compromising personal laptops of people who are doing the right thing (switching to personal gear for interviews).

Sometimes called "Full Spectrum Attack Simulation" where initial entry can include physical access or spear phishing. They can span months in elapsed time (not effort) so as to be more realistic. However there are still ethical and safety constraints and even phishing may not be able to use the (effective) technique of stressing the recipient too much or of course blackmail or coercing. So I think fake interviews may not be allowed in many cases, to protect the employees.

Is that even legal? Wouldn’t a fake job interview be, in a sense, tricking you into taking time off and working without pay?

It'll be hard to time a job opening receiving interviews to line up with intrusion tests in a way that people would not be on guard against it in a way not normal.

Fake interviews would be a huge time sink and probably piss off your staff.