I'd still hire them, in fact I see that level of understanding as a green flag.

Your response and depth of reasoning about why you wouldn't hire them is a red flag though. Not for a manager role and certainly not as an IC.

I provided zero depth of reasoning.

Coding is as much a method of investigating and learning about a problem as it is any sort of specification. It is as much play as it is description. Somebody who views code as nothing more than a formal specification that tells a computer what to do is inhibiting their ability to play imaginatively with the problem space, and in the work that I do, that is absolutely critical.