I understand and truly symphatize with stress the candidate is in, but someone who claims to be a "senior developer with 10 years experience" should be able to write that palindrome function in 30 whole minutes in any kind of stress scenario.

Because if I hire that person, they'll be in charge of critical production systems and will face much harder problems in much more stressful situations and if they can't handle the palindrome question, I have very little confidence they can handle the actual job.