Still, it does benefit the hiring company, just not the applicant in these situations.
Not sure it benefits the hiring company when they are artificially reducing the pool of applicants to only people who don't already have jobs.
Not that there's shame in not having a job, especially in today's market (shit happens, I'm sure lots of very qualified people are currently looking), but there are solid statistical reasons why social proof of already being employed is seen as a positive.
It can be a challenge sometimes, but not as often as you might think.
I’m sure there are heavy-handed employment contracts that prohibit side work, but hasn’t been a problem in practice.