Earlier quoted context omitted.
You are criticizing the "quiz or challenge" style interviews, but you are basically describing a quiz interview. I don't think that most people just expect you to know the answer (like they may in other industries or even government). They expect you to don't know the answer, and then they will try to lead you to it and see your thought process. At least this is my style too.
It's not a quiz. There's no questions. You could call it a free-form interactive essay interview. Pick any subject and converse on it however you like. If it's not going well, pick any other subject.
And there is a reason most _interviewee_ guides tell you to always be honest and say "I don't know". That's to kickstart the discussion/next question as soon as possible rather than unnecessarily get stuck in the "bullshitting" phase that helps no one. It's rather common to encourage this, not a rare thing.