What will you do?

Only golden rule of hiring : Always hire someone better than you .

If he would have showed extra enthusiasm instead of lying and would admit that maybe he doesn’t actually know but is willing to learn then maybe.

I will select a person, even if he is over selling his skills, he shows the confidence to sell.

That's a dumb question. It's an obvious reject. The problem happens when someone lies about something but you really like their skills.