Considering the hostility that can be shown to those of the opposite tribe, especially in tech companies, are you surprised that op wouldn't challenge the higher in position director on such basis?

There were a dozen reasons I didn't.

I shouldn't have had to

I didn't want to be "that guy"

Plenty of other commenters here would argue that doing so is really a political position (defending status quo), which would not at all be what I wanted to convey

It formed a hostile work environment, but not in a way that I wad legally protected from

The discussion wasn't simple honest debate or smalltalk, it was very much "did you see how team A person put down team B person last weekend? She was awesome!"

I should also make clear, this person wasn't my boss, he was director of the department- my boss's boss. He also had approximately 1 to 2 hours overlap in work schedule, as he lived practically on the other side of the globe (we had a world-wide team).

I understand, it is boss(or super boss in the case) responsibility to be able to encourage feedback and open conversation. There is big difference between making small talk and using that time to be on the soap box , no boss should need feedback for that line.

It is just that as a manager, I have been surprised how people think I would take offence on something and not mention it for a long time. I always considered it my responsibility to encourage my team even if they are 3-4 levels down to be able openly talk with me and tell me what I am doing wrong and how can i help them do their jobs better, if they are not able to do that, it is on me.

That is fair. Unfortunately, politics, like religion, can be deeply personal, and it is very difficult to predict how someone will react.

If the company had a proper feedback mechanism- whereby I could have left feedback for him anonymously (so that only his boss would see my name) I might have felt more comfortable bringing it up.