When designers have an understanding of coding , it makes the communication process efficient. At times when developers refuse your proposal, you can bring up alternative solutions.
Any designer can design, but not everyone can execute.
Your interviewer knows you are lying. They lied themselves when they first started in the industry too. However, they need to know that at least you can put the effort to fake it.
Sometimes, interviewers want to know your technical skills and expect a straightforward answer. Other times, they are testing the way you think.
Questions you ask can be more important than the answers you give. How can you decide if you don't even understand the context?
2/2 Argument in features comes down to difference in the bigger perspective. For example, market team might care about message, tech team might care about practicality.
Ask the bigger question: What is the purpose of the feature? How does it align with the business model needs?
UX design tends to focus mainly on user interaction with product, while product designers need to also consider how and why the future product will evolve. Product Design is an evolution of UX design.