Translation:The musicians travel to Gyor, and they play music there.
I ignored accents when typing the answer in English, and Duolingo reported a typo and suggested that I have answered "The musicians travel to Gyór, and play music there."
Why is there an o with a single acute accent? Is this an acceptable spelling in some contexts, is it a typo by the course creators, or is Duolingo buggy as usual?
No, it is not an acceptable spelling. The letter "ó" is a different letter. It is the long pair of the short "o". Since you typed "o", maybe Duo assumed ... no, I don't want to guess what Duo assumed. Anyway, o - ó - ö - ő are four different letters, two pairs of short and long versions of two different sounds. They are not interchangeable. You may end up with a different valid word if you replace one with the other. Of course, usually it is possible to guess from context what letter is meant even if you write without the accents.
Duo might have accepted your answer if you had typed the short version (ö) of the only correct letter: ő.
I don't have access to those characters on my keyboard, as I have an English language layout and character set. If they expect us to type the name using the correct (accented) letters, they should provide the clickable vowels underneath the text box, just as they do for a translation to Hungarian. But maybe this is a limitation of Duolingo, that those buttons aren't available when translating into English?
Well, not so much a limitation as that I guess the developers don't expect anyone to have to write anything in English that uses a "non-English" letter.
The sentences should be changed to not require accented vowels in English sentences, i.e. to accept both János and Janos, Péter and Peter, etc.