I would hope they are clear about what they are looking for when they talk to candidates (Given the time, I doubt they were though!) but I've seen things like this as a way to see how people approach a novel/new problem. Are they excited about giving it a try? Are they meticulous, slow, careful? What kinds of optimizations do they attempt in the process, what questions are they asking along the way?

I work in support though, and being able to be resourceful, creative, comfortable with contradiction and complexity, but ultimately you need to reduce issues to something you can communicate to a less technical customer, so an exercise like that, at least if presented clearly to a candidate, can give a really good idea of how they handle new situations they may run into when there isn't anyone there to help them (like their right hand for example).

Put more simply, I learn more from how people react to and approach hitting a wall/a problem they've never seen before than testing their ability to follow simple instructions (write algorithm X in language Z).

There’s probably something to be said about doing something quickly with high quality, and also in an unfamiliar way.