I have worked in the embedded industry for 6 years, and have worked on a wide variety of projects (from WiFi to drones/airplanes to medical devices), and have never needed to use this, yet the interviewer expected me to know this.
Anecdotally speaking, when recruiters throw this kind of curve balls, it's because they already have someone in mind for that position and are interviewing candidates just to fill paperwork.
Some people ask more clarifying questions than others, but in any case a few minutes gets spent on this, we have a laugh and move on with our lives.
Of the failing candidates, around one in three or so spend nearly the entire interview on this or fail to answer entirely because they can't get the maths right.
Is that a "math trick"? It doesn't feel too different to fizzbuzz. It's not complex. It relies on high school maths, and except for very junior positions, for a job where you are expected to solve much more complex problems every day without handholding, even if you can't remember how averages work so I have to hand you the math, not being able to reason through the problem from first principles seems like a pretty big red flag for your problem solving skills to me.
What do people think?
Once I show someone the 'mod' trick they instantly get it (if they have any sort of math background) but I want to avoid as much as possible anything tricky in a interview. I want them relaxed and not tense. As that is a different kind of test. Throwing in a trivia trick can hurt the interview. I have run across many programmers that are decent at it and have never used it.
Also for your problem it would depend on the level you are interviewing for and how much time you want to allocate for it. As it is also a balance of filter and getting to know them which is mostly time management on your part. Remember you probably are going to be working with them. So a bit of chit chat goes a long way too. You can also use 'fizzbuzz' as a question 'do you know the trick of fizzbuzz'. If I show them the mod trick and they get it right away they show aptitude to learn. If they already know it then see if they can explain it. etc etc... Get them to talk. Also talk back to them like a peer as they very well could be! They should be interviewing you too.
I just try to avoid tricky bits in interviews and expecting tricky results from them. It would be like asking the to write a swap two values function and expecting the triple xor solution. Tricky is for something you have been working on for 3 weeks and need a better solution, plus two spike stories. It is not for interviews. :) Just ask yourself would you be massively annoyed if someone asked you this in an interview with no context as to why and expected a particular answer. If the answer is you would be annoyed then do not do it. If you feel it is OK and you would expect it then go for it. Just remember your time management.
But if you are applying for a programming position and claim a decade of programming experience - and literally can't come up with any path towards a solution - I smell a rat.
The annoying ones are dudes who want you to somehow do a big O proof of some NP complete problem, with tests, proper code, and in front of 3 people in 45 mins (with 5 left for you to ask any questions). For something you may have not touched in 20+ years. I do not want a guy who can create the proof. I want a guy who can explain it in plain English to the 3 other guys in the group and maybe take a few days to get it right and make the code easy enough to understand so when we have to change it in 8 months they can pick it back up.