What the fuck kind of response is this? Attitudes like this are the reason harassment is a problem in the tech industry. Yes, it happens. Occasionally. But not in a situation with these kinds of power dynamics. It is never appropriate to flirt with someone who is trying to engage in a business transaction with you. No exceptions.
You're not listening. It's not happening ocassionally. It's one of the major drivers of relationship genesis. You may knee-jerk deny it and be inappropriate in your response as much as you want.