Lukewarm take: If hiring managers want people to succeed, they would share as much information upfront as possible. Especially with design tests. Treating applicants equally doesn't have to mean keeping everyone in the dark. Don't you *want* to hire someone?

As a former hiring manager… you do want people to succeed and the amount depends on how deep into the process you are. I used design ‘exercises’ as a way to see how you work and how you think. I wasn’t necessarily looking for a specific end result.

What you're describing makes me think of something like a whiteboard exercise, less of a take home exercise

Though I have been hired from take home exercises twice.