a nested for loop is certainly not hard ... however ... they describe the problem as something we thought was a trivial nested for-loop problem which suggests that maybe it wasn't. if the problem was presented in a more abstract fashion, such as print all filenames 'within' a directory, then a candidate may have stalled on which approach to take.
also, someone who has only ever written code using lambda expressions might have difficulty writing a nested for loop
also, someone who has only ever written code using lambda expressions might have difficulty writing a nested for loop