I think this was a terrible idea, and likely reduced the number of top-quality applicants that you received.
After all, many top-quality applicants don't want to jump into some uncompensated "puzzle" of unknown duration and difficulty. They've got actual puzzles in front of them that they're getting paid to solve.
As such, you're getting the best of the rest; the people who have some basic chops, but whose time is sufficiently valueless that they can piss it away on job application puzzles.
After all, many top-quality applicants don't want to jump into some uncompensated "puzzle" of unknown duration and difficulty. They've got actual puzzles in front of them that they're getting paid to solve.
As such, you're getting the best of the rest; the people who have some basic chops, but whose time is sufficiently valueless that they can piss it away on job application puzzles.