"Your wine is not good."
Translation:Twoje wino nie jest dobre.
No, they are not interchangeable. They have totally different meanings. It's just that English language for some reason decided not to show any difference between singular 'you' and plural 'you', thus making all such sentences totally ambiguous.
"Twoje" (and its forms) is singular 'your'. So you will use it when you talk to one person only.
"Wasze" (and its forms) is plural 'your'. So you will use it when you talk to two or more people.
There's no reason to reject one of the answers here, both are accepted. Usually both are also 'starred' answers, here we forgot to make "wasze" a starred answer, which I just did. Still, that doesn't make them interchangeable. It's just that both are correct translations as English is ambiguous.
Firstly, "twoja" is used for a feminine noun, and "wasze" for a neuter one, or a 'not masculine-personal plural' one.
So let's make them match and compare "twoje" and "wasze", as in here, "twoje wino" and "wasze wino".
"twoje" is 2nd person singular, "wasze" is 2nd person plural. So you use "twoje" when talking (referring) to just one person, and "wasze" with more people.
When I say referring, I mean that perhaps you're talking only to Adam, but you're talking about "Adam and John's wine" so it's wine that belongs to more people.
Both "Twoje" and "Wasze" are accepted answers; however, if there was some error in your sentence, then the answer which you will be shown from the top of Duo's list of correct answers will probably be the "Wasze" version. By doing so, Duo is not telling you that "Twoje" is wrong.