"I am eating bread at the cafe."
Translation:Jeg spiser brød på kaféen.
I don't think there is any simple rule to explain when to use i or på. I think at the start you just have to learn common usages: på kafeen på kino på jobben and i banken i barnehagen Then, just to make things more confusing, there are a few cases where indeed you can use both: i/på butikken for example.
It's correct, and accepted on our end, but unfortunately the grading system doesn't cope well with optional accents.
Since this is a technical issue, you can report it through the bug form: