If the point is to identify the speed (or ram consumption) of algorithm, then why not check for that itself instead of the vocabulary in an interview? Why be pedantic when you can instead measure how well they would do as a developer? In an interview you can ask followup questions to see how precise their ability to explain their thought process is.
If someone is so pedantic that they would consider the interviewee to have shot themselves in the foot because they said "The big O is n squared." without any followup questions from the interviewer, that doesn't sound healthy to me. I would worry this kind of culture would extend past the interview and it wouldn't be an enjoyable place to work.
Can you imagine working in a place where people regularly argue over terminology instead of just making sure everyone is on the same page?
(Full warning: I'm not a dev, so I'm coming in from the view of another industry.)