...It's a slightly odd response, like a joke he isn't quite following the track of. Maybe there's some kind of pun that doesn't translate from whatever she's speaking? (Illyrian?) That seems the likeliest.

"I'm afraid I know nothing of Illyria."

Did it ever exist in their world? Does it (or should it) still? He doesn't know. He'll ask Feuilly.

The implied question -- what's it like? -- is a sincere one, but all the same, he'll follow the conversational redirection, and add, with a certain humor: "So if you say that every Illyrian man is sober and wise, how can we gainsay it?"