XYBench: Can LLMs Respond Pragmatically to Queries with Misconceptions?

When non-expert users ask LLMs for assistance, their queries can often have misconceptions (e.g., "How do I parse XML with regex?"). In such cases, often referred to as the XY-problem, LLMs must identify the misconception ("regex are fragile") and meaningfully direct the user toward a pragmatic solution that will address the root problem implicit in the request ("use an XML parser"). We introduce XYBench, a benchmark of 8,115 such queries, drawn from technical (StackOverflow/StackExchange) and everyday (WikiHow and a manually-curated subset) domains. We design an evaluation paradigm that assesses model responses along three criteria grounded in cooperative response theory: (a) presence and (b) emphasis on pragmatic solutions, and (c) identification of misconceptions. Our experiments show that even the strongest LLMs predominantly answer the literal request (0.75--0.92) and far less often the intended one (0.33--0.71), while substantially lagging behind humans at identifying misconceptions (at most 63% vs. 79--90%). Further, models overwhelmingly prefer pragmatic responses in a multiple choice setting yet consistently fail to generate them. Oracle ablation experiments show that providing explicit user intent at generation time helps; however a large gap remains, suggesting pragmatic redirection is a fundamentally underdeveloped capability in current LLMs.