I thought the second part of the sentence would be about how they don't actually have those degrees. If you say that you have the degree you have, that's not embellishing at all, and it doesn't mean that you'll be able to solve a coding problem. They're two separate things and you've kind of mixed them up.
There's two questions
- is the candidate outright providing false information (where they've worked or studied, how much experience they have and with what tools etc)
- does the true information give you the wrong impression about the candidate i.e. you think someone with this degree or with that many years of experience should be capable of more than they are