He capped it at two hours, as instructed
The instructions were explicit: spend no more than two hours on it. He spent two hours. Knowing what that bought, he wrote a README listing the corner cases he had deliberately left unhandled, and why.
He was rejected for not handling the corner cases.
A time limit a candidate is required to respect but the reviewer is free to
ignore is not a limit, it is a trap. It sets the work up to be judged against
a standard the instructions themselves ruled out.