Hi there,
This is a very common question in an MBA interview. And adcoms understand that candidates will apply for more than 1 school. Therefore, mentioning 2-3 schools apart from the one you're interviewing for is completely fine. However, keep in mind the following:
1. Duration of course: Say if you're interviewing for 2-year MBA. Mentioning a 1-year MBA may open doubts about your clarity towards MBA goals.
2. Geography: Same goes for geography. If you're interviewing for a US school and you mention an Australian school, one might think you're not clear on your goals.
You see where I'm going with this. Selection of schools displays your understanding of your goals as well as business school's expertise. This can be applied to Marketing schools v/s Finance schools OR other aspects too.
If you have an admit then mentioning that also may elevate your candidacy especially if the 2 schools are rival schools. And if the question further asks about scholarships that too should be disclosed. In general, hiding something or lying to an adcom should be avoided.
Hope this helps.
Best,