Exactly this. You just put them on the spot and they lose face and you're embarrassing them.
Besides this interaction has already made it know they they don't know the answer so what's the benefit of forcing them to announce they they don't know something?
I've only been in a peer to peer type of working relationships with people I'd consider coworkers so I wouldn't think it'd be very fruitful to start agitating people in such a position.
What position? If you let it pass, you encourage this kind of behaviour.
If they are working for a western company, they should adjust their behaviour, not the company. Just imagine working for an Indian company (or manager), and expecting them to tolerate your individualist behaviour and audacious questions. You would be punished immediately.
If it's a peer-to-peer relationship, all the more reason to be firm. If you don't speak up you will never be respected. And don't think that just because you keep quiet the shitty types of people won't stab you in your back at their first opportunity (ask me how I know).
