While there is no grammatical error in your sentence, it is an odd way to phrase this statement, except for example in poetry or something.
Your English word-order is wrong. "A large mirror is hanging on the wall." A general statement of a possible rule is that phrases and even clauses which act as adverbs of location usually come after the verb, and subject comes before verbs in English declaratory statements. So, "A large mirror (subject) is hanging (verb) on the wall (adverbial phrase of location)".
Sometimes, you can get away with the location being stated first, but you're more likely to get it right if location comes after the verb.
Location first isn't wrong, but it's definitely not colloquial; usually only in song or poetry does one find such phrasing.
How did you actually word the English? You might have used hangs but it didn't like something else about your answer maybe? Not sure...
Why not "The large Mirror" I don't understand when to put an "A" or "The"
I'm not a moderator - so I can't tell what their a/the rules are. That said, this particular Russian sentence sounds to me as a fairly abstract and neutral statement. A natural context would be a general description of a particular room or wall. Hence "a mirror" would be the natural choice here.
On the other hand, if you were to tell someone about a location of a mirror, which has already been mentioned, you would change the word order and say "Большое зеркало висит на стене". This draws the listener's attention to the mirror (as opposed to the wall, as in the original sentence). Personally I would translate this second sentence using "the mirror": The large mirror is/hangs on the wall.
My translation using the word 'hanging' is not accepted, yet Duoling translation misses that word out although it's clearly there, and states my version is incorrect.
What is the rest of your answer? The verb is not just "hanging" but "is hanging"
Зеркало is an interesting word. Where does it come from? The closest thing I can think of is the Italian "zircone", which is basically a fake gem (and "zirconio"/"zirconium" (Eng.), a white, shiny metal that I'd never heard about until 10 seconds ago, lol).