I translated this as 'I do not make breakfast', by which I meant 'I do not cook breakfast', and it was marked correct. However, in reading the other comments, I now wonder if the Italian phrase is more likely to mean 'I do not eat breakfast'. If that is the case, I absolutely agree with the first comment, because in English the phrases 'eat a meal' and 'have a meal' mean exactly the same thing.
Faccio means "I do" or "I make"
"Faccio colazione" could mean "I do breakfast" or "I make breakfast". However in English we don't say "I do breakfast" - the English equivalent to the meaning conveyed by the phrase "Faccio colazione" is "I have breakfast" or "I eat breakfast".
Translating is not a simple one-to-one exercise (though beginners often wish/hope it were like that). True translating is understanding the meaning of the sentence in one language and then expressing that same meaning in the second language in the best words for that language.
While I agree with the sentiment that translating is not a simple one-to-one exercise, in this case we actually do have similar idioms in English... and generally, the syntax dictates the idiom. If you want me to sit down with you and explain this particular instance, then let's "do lunch" sometime and we can talk about it. ;)
Speaking personally, I don't do breakfast. mainly because it's a meal I don't eat until nearly lunch. However, I know that that is idiosyncratic of me. However, one is encouraged by some exercises to be very literal in one's responses. I wish there were some way of knowing how loosely or idiomatically one was allowed to answer a question in a given circumstance!
Depends on the meaning you want to convey. If you wanted to say "I don't have breakfast" as in I don't have breakfast on the table in front of me now - yes I would use "Non ho colazione"
If I wanted to convey the meaning of "I don't have breakfast" as a I don't eat breakfast in the mornings, actually I never eat breakfast kind of meaning - I think "Non mangio colazione" or "Non faccio colazione" would be more appropriate.
Non faccio colazione is literally "I do not do breakfast" which corresponds to the English sentiment of "I don't eat breakfast" or the second situation above of "I don't have breakfast" (the I don't have breakfast in the mornings situation)
In English, we used to say things like "I breakfasted on eggs and ham," because the word itself contains a verb: to break one's fast. And even now, we sometimes say "let's do lunch on Monday." So I can see why Italian might use the verb "fare" to refer to eating a meal, as opposed to making it.
"Many verbs which are irregular in the Italian language have a regular form in some prominent dialect, like the Florentine, and they are still used not only in spoken but also in written language at higher level too. The most famous example is the verb fare (to make), which in Italian at the present tense, first person, is io faccio and in Florentine io fo. Although it is just a dialectal form, it can easily be found, and is accepted, in some prominent modern Italian authors like Oriana Fallaci, who was born in Florence. "