The problem is simple enough to solve without function calls at all (except maybe a comparator function) and this is why I like the second solution better: it is closer in spirit to the level of abstraction of the problem.

I think OP missed the point here: the interviewer was probably testing the candidate's Python chops by offering an opportunity to show off their knowledge of language features and standard library on a simple problem. The result is contrived by using __call__ and itertools, but is better for the purposes of the interview.