I'm not quite sure what are rules about inversion in question. My variant "Comment fais-tu ca?" is not accepted, but, perhaps, it is grammatically correct. What is the intuition about inversion?
I think that Duolingo was expecting that you translate "it" in "le/la" as opposed to "this/that" in "ceci/cela/ça".
Otherwise, your translation is correct.
2 more (verbal) : "comment tu fais ça ?" and "tu fais ça comment ?"
How is "Tu le fais?" correct? Wouldn't that translate to something like "Are you doing it?"
there are several options to translate "how do you do it?":