Thanks David. This is really helpful. Based on your note, I think I now understand what it could mean.
Since their final round has separate ‘product prioritization’ and ‘analytical’ interviews. So I am guessing that product prioritization during the phone screen should be along the lines of your second point i.e. product intuition kind of question.
I have seen a question asked in the past on the internet that now based on your note, I am guessing is a prioritization question - You are a PM for Instacart. What would be the worst problems in the delivery experience after the buyer has placed the order?
That also now seems to align with the initial guidance provided by the recruiter: Your interviewer will give you a case study on a third-party business, and you’ll work to solve a problem. Be prepared to illustrate your framework on how you would prioritize.
And on further probing, was told that they will assess: PM fundamentals with prioritization (structure, metrics, etc)