I will never understand the desire to handicap interviewees like that. I recently passed an live-coding interview in which I was asked to use an unfamiliar library; bc it was open-book I was able to look up its docs and use it to solve the problem. At one point I also hopped onto MDN to confirm a browser API. The ability to search and effectively leverage available resources is fundamental to our profession. Closed-book "pop quiz"-style puzzles -- where the surface area of the relevant material is unbelievably vast, and the relevance of the problem to the job's requisite skills is tenuous at best -- are highly problematic.

If you gave me such a code challenge, I'd probably take it as a sign that company culture is to put employees under pressure and I would immediately decline.