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I have never heard of anything secure doing that. Assuming they have taken security steps, it would mean they recorded those characters in plaintext when you set your password, but that means that at least those characters aren't secure, and a breach means some hacker has a great hint.
When the hashing occurs, it happens using the code you downloaded when you visit the site, so it's your computer that does the hash, and then just the hash is sent onwards, so they can't just pull the letters out of a properly secure password.
A secure company would use two-factor authentication to verify you above and beyond your password, anyway, since a compromised password somewhere else automatically compromises questions about your password.
A lot of banks in the UK do it. They normally have a secondary pin that they will ask for 2 or 3 characters of.
This means that if you log in and get keylogged/shoulder surfed etc they don't get the full pin. The next time you login you will get asked for different characters.
Not great, but not awful either - going away now that 2fa is more common