I always thought that was southern slang
I think they offer it as a translation for Ustedes to emphasize that it is you (plural) and not you (singular). I've never in my life said "you all" so I find it quite awkward.
Please know that we accept "you all" as a synonym for "you" for German "Ihr" (2nd person plural), but only in cases where "all" follows the pronoun "you".
"Ihr seid Männer" = You [all/] are men. but not "You are all men" "Ihr seid alle Männer" = You [all/] are all men.
That makes sense . It does sound strange though in a language learning program.
I agree that "you all" is awkward. Very much so. Until very recently I wasn't even aware that anyone used this at all, and I have yet to hear it spoken by a real person. I am consuming a lot of English and some American media every day and have lived in England for several years. It's simply unknown there, and I am sure it sounds very colloquial anywhere. Unless, of course, one actually means "you all", i.e. "all of you". A tiny number of people on the English Wikipedia use it occasionally and for effect, and Language Log once had an article about the phenomenon. That's why I was aware that this even exists.
Btw, while I am sure that I have seen "you all" for "vosotros", I don't know if I have ever seen it for "Ustedes". That would be even more wrong as it would be the most colloquial register as a translation for the most formal. Keeping in mind that "Ustedes" literally means something very similar to "Your honours" (which is why nobody says it in Spain nowadays), we might just as well translate that as "chicos" in the other direction.
Saying "y'all" or "you all" is definitely used universally in the South, even by politicians, professors and other middle-to-upper class people (assuming they are southern themselves). It's weird for me to hear that "you all" sounds awkward to people since I hear it all the time! I wish "y'all" were also an option since it is said by a significant amount of the English speaking population, without being restricted to a certain class, race, etc. just like "you guys" is