"I hate anything that asks me to design on the spot. That's asking to demonstrate a skill rarely required on the job in a high-stress environment, where it is difficult for a candidate to accurately prove their abilities. I think it's fundamentally an unfair thing to request of a candidate."
[EDIT] and on the topic of your quote, in actual work screwing up while working through problems in a meeting or while collaborating is (or had better be) normal, and everyone's working together to find the right solutions. If you miss something you missed it, that's fine, even if it was something dumb, everyone does that all the time, NBD, unless you're doing it just constantly no-one will think a thing of it. Expectations, explicit and implicit, in an interview make it way less friendly and safe feeling than even a very important or relatively high-stress task in actual work life. It's not even in the same category of activity as solving problems at work.