Not OP, but I use whiteboards to sketch system designs and things like that. For instance, I'd sketch out the path that a request might take through a complicated system (intake via a REST service, flows through a queue, consumed by another service, persisted to a database...). That's the sort of thing that I would be comfortable doing as part of an interview—though I wouldn't expect a junior developer to be able to do it.

AFAICT, the backlash is around interviews where candidates are asked to write code (or pseudocode) on a whiteboard. Being able to implement bubble sort on a whiteboard does not correlate very well with being able to deliver business value, in my experience.