It should be. Please, use the 'Report a Problem' button next time you encounter this sentence.
That is because it isn't wrong. All the comments here about Duo being wrong in this example are based on its English translation. Duo is correct in the choice of English.
Russian has one word for certain social situations where English has two. Duo is telling you that your choice of the possible intent of the Russian word is not correct for the apparent social situation.
Of course, it is possible to construct a situation where someone is asking about someone else's presence and you respond with excuse me rather than sorry but what is the point of trying to be creative? In the typical social situation in a similar English exchange, you would say sorry.
Duo wants to know if you understand the dual meaning of the Russian word. You can go along with it or reject it and replace it with your own understanding.
Well, there're different ways, for example you could use the verb «отсу́тствовать» 'to be absent':
Извини́те, она́ отсу́тствует. 'Sorry, she is absent.'
Or you could put it this way:
Извини́те, она́ не зде́сь. 'Sorry, she is somewhere else.', 'Sorry, she is in another place.'
This shifts the accents slightly: «её здесь нет» makes an accent on the fact that she is not here (this works better as an answer to the question "Is she here?"), «она́ не зде́сь» makes an accent of the fact that she is somewhere else (this works better as an answer to 'Where is she?'). But the difference is very subtle, and they are interchangeable in most contexts.
What's the deal with the word order? Why isn't её placed after нет like normal?
Basically, we put the new information towards the end. And «её» doesn’t work as new information, because the speaker is expected to know who ‘её’ refers to, so it’s known information.
«Здесь нет её» could work if you’re showing a photo of a lady (then, it’s new information, you’ve just took out a photo and introduced a new person), but in most contexts it’s unnatural.
'excuse me, she isn't here' - is obviously a incorrect interpretation in this exercise.
your mistake is that извините can be used in Russian as either sorry or excuse me.
from a native USA English speaker, only in a very particular situation would you use excuse me.
like if a person had offended you while asking if the girl was there.
A very specific situation indeed.
Yes, if you interrupt someone to tell them something you would use excuse me. But if you were responding to a question, you would use sorry.
If you thought this example was about interrupting someone, then choosing excuse me was a wise choice. But it you regularly use excuse me instead of sorry because it is easier to always use the same translation or you think it doesn't make any difference in English, then you were wrong.