I wouldn’t spend more than 8 hours in total for a design challenge for an interview. For my skills and ability, I can come up with a thoughtful design solution from sitting down with the challenge to 2-3 visual designs. I view these 8 hours as a chance to impress them and set me aside from other candidates, kind of like marketing cost if you will. But I won’t spend more than that amount of time for an interview.
For 4 hours, I can only deliver a few wireframes to prove my concepts. So if they specify 4 hours, I would let them know that they will get rough wireframes.
To speed things up, I would use ready-made UI kits or design systems like Material Design so that I’m not spending time pixel-pushing. Rather, I want to focus on showing my design process, how I start from a challenge/customer need to a design solution. Getting the visual design done is just a nicer way for people to envision the final solution.