Yep pretty much this. I was a contract interviewer with Karat for a few years and taught people how to conduct interviews. There's a graded scale of assistance, anything more than gentle prompting to re-read your code or the error output starts counting against you. If I have to point out a block of code or even a line, then that's getting to the point that most clients will pass you over when they review your interview, so the rules are we don't give that stuff proactively.

I used the "may" word as I wasn't sure it's something we are meant to be disclosing, but now that the cat is out of the bag you are indeed 100% correct and this matches my experience.

One thing I didn't appreciate with these rules from a candidate perspective (and encouraged my decision not to continue my onboarding with Karat), there seems to be no way to learn from the process. I actually bombed my practice interview (and knew it would happen even before the interview) but the interviewer was very reluctant (due to the above rules) to actually solve the problem with me, where as a conventional non-Karat failed interview would at least give me the solution in the end and I'd at least learn something.