That could be framed as an interviewer skill issue. We're supposed to give the candidate space to demonstrate both their productivity and their talent. So if expecting a programmer to reveal their abstract thinking capacity through some complex domain-specific task, building a REST API for CRUD may not be the ideal vehicle, being so mundane as to lend itself unquestionably to off-the-shelf framework solutions almost any mature language.

I actually had a similar thing happen to me, blazed thru a similar "design an API" type question flawlessly, but they didn't like that I didn't write up a lot of custom code for standard CRUD stuff...

It's like they wanted me to overcomplicate things for some reason

Eh maybe. But if they want someone who can wank off instead of ship things, then I don't know that I want to work there. And I'll never know since places don't give you feedback despite the time and interest you showed.