You'd be concerned that he tried to show off in a problem that was clearly highly contrived for the purposes of an interview?

Well, I'd be concerned too. But just ending the interview process immediately is incredibly naive.

If you see a candidate do something like this, your reaction is probably a mixture of (1) being impressed; (2) being wary that they're always going to be like this. So what do you do? You ask them about (2).

But of course, that's not going to happen in this example, because the company is implied to have an incredibly rigid interview process which cannot be modified or adapted at all on the spot.

The interviewer ran out of time - there was no choice but to end immediately, so you would have to either invite them back or call them later. eh. too much effort. Lets just hire the other guy.