But then in that case, the problem as given is still bad, because it gives that part away! If you want to test this ability, you shouldn't frame the problem in terms of linked lists. As another poster here suggested, you should ask something like "The customer gave a list of everyone and who they report to. How would you sanity check the hierarchy?"
That then requires the candidate to identify cycles as something they'd want to look for, and then this problem as a special case of "find a cycle in a linked list".
For example, given the loop in linked lists question, even if a candidate is not able to solve it completely, a reasonable approach would be to break the general case to more specific, trivial cases, such as: what if the loop has known length, what if the loop starts at a known location, etc. Interview questions are not binary decisions, you can learn a lot from a candidate just by seeing how they respond to a question.
But if you go up a few steps then suddenly the problems might not be that clearly defined and the set of possible solutions can be huge. A person who is constantly relying on Google to come up with solutions is probably not going to be that useful in design discussions.
I'm not defending the particular question, but on-your-feet problem solving is a real and valuable skill.