I've heard a lot of variations of this! Like "Design a bicycle" or "how would you make a PB&J sandwich?" with the goal of seeing how they walk through the steps in the process. Are they detail-oriented or do they focus on larger concepts first/what kind of assumptions do they make?
I suspect it depends on the interviewer. In my case, I talked through how decisions would be made. I "homed" each elevator to the lobby when it wasn't in use. I had internal button presses override every other call, etc.
Then, the interviewer asked me for adaptations. Things like, what if you have multiple elevator banks? What if the building is 100 floors? Etc.
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