1. Fresh CS graduate from the top university (MIT, ETH, Stanford, etc..) - I agree, it is a bad sign.
2. Mid/late career professional - I disagree.
3. Self-taught professional - I disagree.
In latter two cases, some might just never needed/seen similar reasoning/algorithm implementation in their life, but that doesn't make them bad programmers.
Another point - many interviewers have beforehand written down exact fixed algorithm, and if your solution diverges at some point with that single variant (although your solution might be correct as well) - this is the red flag for them - and they interrupt you in the middle. I've experienced this even with an open ended design questions - this is really frustrating.
And my last point - remember that when KMP were coming up with this algorithm, no one were breathing in their back/neck.