> It's 2140 AD, New York is under water up to X feet high. Buildings have been retrofitted with <magical-ish material> to withstand the water. You are in charge of keeping your building dry. If water gets in and damages the foundation, a few thousand people die or become homeless.
> Design a system that ensures that doesn't happen.
How candidates approach this, how they think about redundancy, how they deal with additional constraints or extra scenarios thrown at them tells a lot about how they approach things. The question is not about software (explicitly) on purpose so that it gets people out of the coding mindset.
With more software-focused systems you always get candidates who starts writing code and designing objects and classes and stuff. No, I want you to design a system. Stop writing code.
The reason this question is unburnable is that there's no right answer. You're being asked to show how you work through an abstract problem and design a solution. You aren't being asked for an answer.
So far everyone who did well on that question has turned out to be a great engineer. Whether they were fresh out of college (and learned a lot fast) or they were already experienced.