Translation:I saw the green dragon coming out of the cave.
It's not wrong, and neither is "I saw the green dragon come out of the cave", which DL also rejects. As ToddKedes pointed out, there are problems with English translations in this module. In fact, there are problems with English translations across the course, especially towards the bottom of the tree. IMO that's the single biggest problem with DL Hebrew, at least as of May 2018.
To be fair, the same thing happens in other DL courses, too. Modules towards the bottom of the tree tend to be proofread a lot less carefully than modules towards the top. Most users never get that far, so they get lower priority. In a course that only recently emerged from the incubator, and that is entirely volunteer-run, that sort of triage makes a lot of sense.