Couldn't the same translation be achieved with "Was ist mit den anderen Katzen?"
Yes, that would be a better translation. Duo isn't very accurate, here. 'mit den beiden anderen Katzen' means 'with the two other cats'.
"What is with the both other cats?" What is wrong with this translation?
In English it would be 'with the other cats' or 'with both of the cats' but 'both' and 'other' don't work together here. This isn't one of Duo's better sentences ...
How about "What is with the other pair of cats?"