You can answer by turning your answer into a question. I'd do it like this:
Tell him that you expect interviews to a great extent consist of micro-experiments, trial runs at observing what you'd do in a typical work situation, and assessing you for it.
Since the requested activity involves teaching, say you'd conclude that, at work, you'd be expected to teach.
Now recap what your job description appeared to have been just until this moment, immediately prior this question was asked. Determine whether or not any elements of teaching appeared to be in it.
If teaching was already required, agree to the task, but say the subject selection filter "subject to be unknown to the interviewer" can't be resolved due to insufficient information. Say the lesson subject can't be chosen unless more information is provided. Ask what a subject may be, he can only name but not explain, and that you'll hopefully proceed to explain. If he says he's ignorant of many subjects he cannot name, mention subjects by name until he gets to hear one he does not know.
If teaching was not already required, ask whether this question means teaching is actually required (it might have been omitted earlier), or if it's a 'test' question, a 'character' question, 'reaction' question, exploratory, maybe seemingly irrelevant... what is its purpose? Ask him to explain the rationale behind the question, how it will be treated, and how anyone can benefit. Tell him you suspect the question may be part of a bigger problem, or context, and you'd like to know more about this context before you give this question a treatment. Tell him that you won't treat (meaning answer) this question without context because your first reaction would be to comprehend this motivation or context.
Appear to be logical, thorough, rational, constructive, but don't rush at constructing. Do not appear to actively participate in situations you don't have a good understanding of. If you're asked to participate, seek to further your understanding before you decide when you've got enough to engage.