"Well I would probably go home and work on my resume because that's a fool's errand."
I hate going to work and reinventing wheels all day because the company I work for thinks it's so special that every business function needs a 100% tailored solution to solved problems. I much prefer working somewhere that's able to tailor business processes to conform to existing standards.
But maybe that's just me.
I absolutely want people I hire to be "difficult" when the moment calls for it. If the scenario is one where the right business/user choice is "let them keep using Google Sheets", then the answer I want is "Google Sheets seems fine to me", no matter what people with more power start out wanting. Too many developers have been encouraged to be minions, not professionals.
Ditto for ones who act like everything is a nail for their coding hammer. A developer who can save a company a couple hundred thousand dollars by not turning something simple into a big coding project is a rare and precious commodity. Or should be, at least.
The thing to do isn't to give demerits for "being difficult". The thing to do is to then add something to the scenario where they get into the thing you want them to get to. "For this, we need better access control than Google Sheets allows us." Or, "We need this to be more closely integrated with our accounting system."
Unless, of course, what you're hiring for is the willingness to roll over for unreasonable requests from people with more power. Which, honestly, a lot of places are.
While you consider it a huge warning sign, have you ever employed someone who would answer that way or are you assuming that you're not capable of making hiring mistakes? I can't help but think this "huge warning sign" might simply be a cognative bias where the interviewer is misdirecting their frustration in the poor design of their own process at the candidate [0].
For reference, I think both answers are fine and both perspectives (its a positive or a negative) are equally valid. Its just that I don't think we can confidently state either way.
Anything from "imagine we are in a parallel universe where Google Sheets has not been invented yet" to "how would you design a google sheets competitor" would do the trick.
Source: interviewed hundreds, incl FAANG.
Someone giving an answer like "that's a silly, unrealistic scenario" is more likely than not someone who isn't in need for that job to begin with. I'm sure it's something many wish they could say, because the interview pipeline can be very grating. But not everyone needs to play that game.
I think a lot of people miss this point.
Real projects are complex and have tons of context at the historic layer, political layer, and technical layer. If I have one hour to do the interview, I need to get to some shared context with the candidate quickly, or else it'll just be an hour of me whining about my job. And I usually don't need someone who is already a senior subject matter expert, so I'm not going to ask the type of question that is so far down the rabbit hole that we're in "wheels haven't been invented yet" territory.
Fundamentally, that's why I'm asking a somewhat generic design question. I do also dig into how they navigated those layers in their past experience, but if I don't see them in action in some way then that's just missing signal I can't hire on, and that helps neither me nor the candidate.
In another company or timeline perhaps I could run a different interview style, but often you're working within the constraints of both what the candidate is willing to do and what the company standardized on (which is my current situation).
It's not your problem they're hellbent on building a new wheel. They're willing to pay you!
Chances are, you've thought of your own pain points in whatever they've asked you to build and you've now got an opportunity to shine by solving them and demonstrate your expertise.
Some even say, this tool will replace a lot of workers soon(sic!).
That's the goal of "fuck you" money. You go through the politics and pantomimes until you have the power to stop playning those games.
Funny times we're in right now.
You still need some "locking" mechanism so two people don't try editing at the same time.
Which again probably means Google Sheets is the best answer!