The question as worded seems to set up a false dichotomy: [a] Either black lives matter (implying that all other lives do not matter), or [b] All lives (except black lives) matter. Interpreted literally, the question makes no sense. It's not an either/or proposition. If all lives matter, then black lives matter because black lives are a subset of the set all lives.
A literally correct answer to the question, then, is:
Q: Do black lives matter, or do all lives matter?
A: Yes.
If we're simply looking at the surface meaning of the words, then Sanders' answer makes no sense:
Q: Do black lives matter, or do all lives matter?
A: Yes. The police are a bunch of racists!
The question doesn't seem to ask anything at all about the police. How did that become relevant? Apparently because Sanders and the questioner were either talking past each other or talking on code.
It seems the "black lives matter" movement is generating more heat than light because the people who say "black lives matter" mean one thing and many people hear something else, and the people who say "all lives matter" mean one thing and many people hear something else.
Hopefully, what is meant by the words "black lives matter" is "black lives matter, too" not "black lives matter to the exclusion of other lives." Unfortunately, oftentimes what is heard is the latter statement rather than the former, which prompts the response "all lives matter," hopefully meaning "all lives, including black lives, matter." But then what is heard is "all lives matter except black lives."
I think it is counterproductive when "black lives matter" slogan is spoken with one of the following two meanings: (a) "Black lives matter, and let's kill some police officers to prove it," as Louis Farrakhan seems to be saying, or (b) "Black lives matter and the police are a bunch of racists," as Bernie Sanders seems to be saying.
For a contrasting view on the issue of whether the police are a bunch of racists, see Heather Mac Donald's article in the City Journal, "The Myth of Criminal-Justice Racism."