One of my techniques for design positions was to say "a manufacturer wants us to design a traffic light controller for a 7yo toy car/road set. What do you suggest?". Then we would have a leading conversation based on what they thought of and what the company would do. That two way flow of information was most revealing.
Posing a simple project can be a good approach. For experienced engineers, asking them to talk about a previous project can flush out a lot of useful information about the person. Especially when you are trying to figure out the level of seniority that enjoyed in their previous work.
Very true. Any interviewer that didn't/couldn't do that would be a Big Red Flag that it would be a bad place to work.
At one interview I explained all the hardware and software I'd created. The interviewer clearly hadn't been listening since he then asked me if I was "really a hardware or software engineer". I instantly switched off, and was merely polite for the rest of the interview.