This "authority" is in error; the past perfect is not necessarily required here, although there are circumstances in which it would be preferred in formal discourse, and the simple past is not incorrect, although there are circumstances in which its use would be deprecated in formal discourse.
This is in the first instance a matter of context— specifically, what you are trying to express and what time you are talking about, what grammarians call Reference Time.
Perfect constructions do not express events prior to Reference Time; they express a state grounded in prior events which obtains at Reference Time. So if you are talking about a time in the past when your subject's previous unfamiliarity with bears was of immediate relevance, the past perfect will be appropriate:
As she was hiking in the Tongass National Forest she was suddenly confronted by a menacing dark creature her own height and twice her mass. She did not recognize it—she had never seen a bear before she moved to Alaska.
But if your Reference Time, the time you are speaking about, lies before the time at which she moved to Alaska, a past perfect will not be appropriate:
She was in her youth a keen student of wildlife—kangaroos, wallaby, emus—but she never visited zoos, which depressed her, so she never saw a bear before she moved to Alaska.
In less cut-and-dried circumstances, usage varies: formal usage and British colloquial usage tends to employ the past perfect more often than US colloqual usage. If you have an appetite for technical grammar, I modestly recommend our Canonical Post on Perfect Constructions, particularly sections 3.2 and 4. If not, the best 'rule of thumb' respecting use of the past perfect is FumbleFingers‘ Perfect Truism:
”Don’t use the perfect unless you need it.”
Your version of the answer is correct, because when you were answering the teacher's question, you both were in the present. So only
I went to the toilet.
..is okay.
If you were relating this whole story later to somebody, then you might use the Past Perfect:
When I returned, the teacher asked me where I had been. I replied that I had gone to the toilet.
The Past Perfect is possible because you are retelling this story now. The moment when the teacher asked you is in the past, and the moment then you visited the toilet is in a deeper past.
Grammar terminology: my second example uses "backshifting" of tenses. More specifically, this is called "a backshift in reported speech" (here's another helpful explanation).
Best Answer
As you say, what you would ordinarily say is
If you are required by the imbecility of testwriters to use a perfect, it must be a past perfect.
Because you now have the watch, you cannot say that you have lost it (except in a very unlikely 'experiential' sense of the perfect). Consequently, only the past perfect would be at all likely.
However, the past perfect is not required; in fact, it is inappropriate unless there is in the discourse some salient past time to which the perfect is related. For instance: