Obviously - Duo doesn't want us to learn how to say this sentence.
Russian requires double negatives, so instead of «или» (or) you should use «ни... ни...» (neither ... nor): «Мои дети не любят ни молоко, ни хлеб» works well.
If you use «или», the phrase «Мои дети не любят молоко или хлеб» would sound pretty unnatural, but still understandable.
Well, because the original is "My children do not like milk and bread." and not "My children do not like either milk or bread."
How precise are Russian speakers with this kind of thing?
What I mean is, an English speaker saying "don't like milk and bread" might mean either "don't like milk and don't like bread" or "don't like milk combined with bread". It's more precise in English to say, "like neither milk nor bread".
So the English is ambiguous, but if a Russian speaker says, «не любят молоко и хлеб», is it unambiguous?
As discussed above, the structure of the sentence indicates that the children do not like milk and bread together. For example, I like milk and I like cereal but I do not like to eat milk and cereal because the flakes get soggy.
I'd add that if, as discussed above, the sentence were «Мои дети не любят ни молоко, ни хлеб.», the preferable English translation would be either "My children like neither milk nor bread," or "My children don't like either milk or bread." See this guide to using "nor": http://www.quickanddirtytips.com/education/grammar/when-use-nor?page=1
Pronunciatin of ЛЮБЯТ I hear ЛЮБАТ Does the yod in Я disappear because of the б
When Я follows a consonant, it doesn't have a yod. Instead, it changes the pronunciation of the previous consonant: ба /ba/, бя /bʲa/.
Please see the guide by olimo: https://www.duolingo.com/comment/11754722