I was once, many years ago, asked the question “A cowboy rides into Town A on Sunday, spends 3 nights, leaves on Wednesday, travels for 1 day and arrives at Town B on Sunday, how did this happen?” in an interview. Having never heard the simpler riddle this is based on before, I couldn’t answer it, my brain doesn’t appear to be wired this way. The interviewer seemed upset that I was unable to realise the alternate meaning hidden in the words.
I do think one of the commentators on the original article hit the nail on the head though — despite it’s poor grammar I think the Google question isn’t asking you to design the interface, it’s asking you how you would design the interface. The question is about the process, not the result.
P.S. I got the job anyway and quickly became a top performer in the business, so (n=1) the cowboy question wasn’t helpful in predicting who to hire or how they would perform.