"TO" (It) is a subject and it takes the nominative (just like English
predicate nominative which refers back to the subject, it = book)
To IDENTIFY "It"- a thing (encyclopedia, entry) - nominative:
It is a book - TO jest książka/ TO (jest) książka (nominative)
To DEFINE the thing "it" (encyclopedia, definition) - instrumental:
(The thing) "It" IS a book - Ta rzecz JEST książką (instrumental)
It's indeed devoiced to [sz], because it's followed by a voiceless consonant.
Just putting this here for someone to see. A lesson on the app asked me to translate "it is a book" before teaching me what the word for "book" was. None of the words were underlined so I could not tap to learn it that way. I understand the browser version may have had it in the tips & notes, so again, it would be nice if that was added to the app at some point.
It would be very nice to add the Tips&Notes to the app, but unfortunately it seems that the staff decided otherwise, at least for the current format for most courses (some more important languages, like Spanish, have a new format of Tips that is also present in the app).
Regardless of that, the hints can be checked for absolutely any word, including those words that you've seen hundreds of times. It seems like a bug if "książka" wasn't highlighted for you, but it doesn't need to be highlighted, you can check the meaning anyway.