It's a great touchstone. Sure, it's subjective, but it gives valuable insight into someone's level of skill, how they approach problems, how they do diagnosis, and so on. Are they scientific? Do they hate on people and their code? Do they follow through with testing?
I've gotten answers ranging from "I don't know" (which is a fail, by the way) to full-stack expositions that boil down to bad code generated by the compiler, to someone finding and solving a fundamental design problem in a years-long project.
Any sufficiently senior engineer will have a tale of a bug that they tell in the circle around the campfire when the kids are tucked away (and probably still listening anyway). And if you're not a seasoned vet, I'd still like to hear about the race condition / double free / syntax error that took you a while to find.