I have to agree with the dissenters. I wasn't looking for a mistake and I too decided that it was testing an insert where it was conditional on rows earlier in the insert. I did initially think that as it was only an insert then there would be no rows returned, and assumed this was a case of a misused term in the question so put 5, as the number of rows that would be returned from the select and inserted into the table.

It's ambiguous at best. It only 'tests reading and reasoning' if you're specifically looking for something to analyse. We didn't know what you were trying to do, therefore we can't know that the extra union all was unintentional.