Shady code test or not, I don't agree with the manner in which you handled the situation. You agreed to do the test, submitted it partially completed, and then replied that it should be sufficient (knowing full well you didn't meet the requirements). I doubt the CTO didn't understand that the other cases would be trivial to implement; he simply sees a half-finished submission and a candidate who didn't correct the mistake when given the chance. Had this been a college exam and not a code test, would you expect a professor to award you a passing grade based on the entirety of the test, or the questions you chose to answer?

One thing to keep in mind is that while you may view the code test as bad, it might not having malicious intent; some managers simply lack experience in putting together tests and fall back on old specs. There's two things I do during interviews prior to writing a single line of code:

1. Every code test I have taken has been brought up during a discussion. I use this opportunity to ask questions about the test. If you're interviewing with a recruiter who's not familiar with the test, they'll forward your questions to the manager who's evaluating the test for clarification. The manager's response will come either prior to accepting the assignment, or with the assignment attached to it.

2. Immediately upon receiving the code test, I review the spec in its entirety. If I have concerns with the spec, I raise those right away, as to not give the impression that I'm incapable of completing the spec if I bring up these concerns at a later time.