I had a recent experience with a bad hire that fits everything in the cast as to why panel interviews are a bad idea.
In my organisation (Australia, large public educational institution) an applicant writes out their answers to the selection criteria (mini-essays) and the applications are reviewed and potential interviewees are selected. All interviews must be panel interviews - at a minimum the panel chair (who may or may not be the hiring manager), someone from the hiring unit and an external to the hiring unit. More usually the panel also includes an HR representative and a union representative (depending on role). Questions are worked out in advance and each person on the panel asks set questions.There is little opportunity to probe and ask clarifying questions. Interviews rarely last longer than 30 minutes, if that. A report is written as to whether the candidate is appointable, HR checks the referee's, the hiring manager reads the referee report (but can't speak to them) and says whether or not to make the offer. If you are lucky 6-8 weeks later you may or may not have a new hire.
The role was part time for six months reporting to me, fairly low level role. Four person panel, my manager was the panel chair. We had one applicant (internal) who on paper looked like they had all the skills and experience needed. They interviewed well according to the different inherent biases of the four person panel - my manager was particularly impressed with them regarding a skill they claimed to have which actually wasn't one they would need in the job and there was that "turn in the debate" moment where all the panel agreed on "one sentence good answer".
We had to make a hiring decision and as the person "ticked all the boxes" we made them an offer. The alternative was to go through the full recruitment process again which would have taken another four months (which was the length of time it took to move things through HR to advertise the role in the first place).
The first day they were in the role it was clear it was a bad hire and one that could have been avoided if I had been able to have a one on one with them and ask the questions I could only ask when they were actually sitting at their desk. They didn't want the job, skills they said they had they either couldn't do or wouldn't do, they were disrespectful to me and uncommunicative, they refused to learn how to use the standard issue desktop computer (a Mac) used by the previous incumbent. It took us 9 weeks to manage them out, which we could do because it was a fixed term role. If it was a permanent role we would have been stuck with them until they resigned.
Yet all of us on the panel thought that the person was eminently appointable when in reality they were a total waste of time.