Translation:He is reading his brother's short story.
I would argue that the correct preposition to use when reading a novella to someone would be "for". However, it's not at all uncommon for people to use "til" instead, which is why your answer was accepted here.
As long as we allow for that (and I do believe we should), the sentence is ambiguous.
'å lese til noen' = 'to read to someone' (for them to hear)
'å lese til noe' = 'to read for something' (an exam, test)
The above sentence is ambiguous without context, and it could mean either "Han leser (novellen til broren sin.)" or "(Han leser novellen) til broren sin."
Duo keeps a deeply flawed synonym list which we can't override. Among other things, they equate story=storey=floor, which is incorrect in most contexts and messes with our translations for "novelle", "fortelling", and "gulv".
We've complained about it for years, so I don't expect they'll change it any time soon.