You'd be mostly reading code and writing <100 lines of C, much of which would be copypasta. I'm not convinced having the familiar editor would be that big of a deal here.
reading code (or more correctly, navigating an unfamiliar codebase) is difficult in a setup you're not used to.
I myself rely heavily on IDE click thrus and reference searches.
Purely using grep sucks, and a plain text editor's search function might also not function as smoothly. This all leads to friction.
This type of interview requires the candidate's own dev setup. If they could prepare ahead of time (e.g., give the repo to download and setup the IDE etc), then it would be fine.