It makes total sense from the employer's perspective to simulate a work experience with you prior to hiring. However, there's a pretty clear line between a fair request and making you do unreasonable work to assuage their fears.

If it's a design task that directly contributes value to the company (e.g. "redesign our onboarding workflow"), I would not do it unless I were paid for the time. Even if they don't rip off the deliverable, they will still benefit from your process & ideas.

It wouldn't hurt to respond with a cordial request for comp citing the above reasons. If they decline, it's a red flag regarding their company culture.