What should you do when your supervisor suffers from Dunning Kruger effect? My supervisor wants to borrow some ideas from another sub-discipline into his own sub-discipline. The problem is he is suffering from Dunning Kruger effect. He just has some very basic knowledge about that sub-discipline. He thinks he has a very deep understanding of that sub-discipline and he doesn't need to invest time as they are too low level details to spend his time. As a result, he comes up with some wild hypotheses (anyone who has good understanding of that domain will simply know it doesn't make sense) or something that's obviously true. And he keeps arguing that his hypotheses are true and noble. As he doesn't have good understanding of that domain and he thinks it's too low level detail to spend his time. So after some time, the whole argument turns into opinion based arguments, no longer fact based or reasoning based arguments. Then he becomes very rude and keeps demeaning us (me and another PhD student). 

He doesn't allow us to work on or discuss our own hypotheses, he simply discards them without giving any constructive feedback or any reason why we shouldn't work on or discuss them.

At the end of meeting, after long arguments and rectifying my supervisor's hypotheses, he claims he is the one who came up with these amazing hypotheses and we didn't contribute anything in the research, we just did the experiments. 

Now meeting with my supervisor has become emotionally exhausting and unproductive for me. We are wasting time because he thinks he has deep understanding of this new domain.

Just to make it clear, I am not saying he is not smart. He is a smart person. But he doesn't understand this new domain and thinks he has deep understanding.
This seems on the border of a &quot;Here's my story, now what do I do?&quot; type question.  But the title question seems reasonable.
If you feel like your advisor does not have enough knowledge about something to usefully direct you: first, try to get some independent confirmation that that's true.  The Dunning-Kruger effect may not be cutting in the direction that you think.  But assuming it is: you either need to direct your research towards your advisor's expertise -- this is, by the way, a quite normal process in most student/advisor relationships, as academic knowledge is vast but in order to make progress most academics are highly specialized -- or you need to find a different advisor.  In your case

At the end of meeting, after long arguments and rectifying my supervisor's hypothesis's, he claims he is the one who came up with these amazing hypothesis's and we didn't contribute anything in the research, we just did the experiments.
Now meeting with my supervisor has become emotionally exhausting and unproductive for me.

it sounds like you have lost faith in your advisor.  Consider looking for someone else.