In A both the interviewer and the interviewee are giving a similar amount of time. In C, only one is giving time. To compensate, the other should give money.

In C the interviewer is also spending time reviewing the assignment. Maybe not the same amount, but if you also have a handful of your current devs review it and give their feedback, the company time spent on it might not be trivial.

Also there is usually more than one person sitting with the interviewee when they come in, so the company time spent is multiplied at that stage.