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These are tests which have been extensively normed with various ages, disabilities, normal and abnormal behaviors, etc.
They are legitimate and valid measures of mental status, psychiatric disorders, and also memory.

So we know just about how each age group should be expected to function on various measures.

Also with clinical training we know that there are exceptions to the data.
Sometimes people will forget trauma based details.
Even healthy young people will block out facts related to a trauma they have experienced.

So for example if someone cannot recall a fact related to a trauma, a clinician doesn't get too excited.
This is normal. You can often see a person recall some aspects of a trauma with great detail.
Other parts of the trauma are completely blocked out.

Also even if there is some memory slippage, the real issue is cognitive functioning over all.
Do they have the critical thinking skills, experience and training to do the job.
There are people with perfect memories who cannot do quite a few jobs.