"Portofelul de pe masă a dispărut."
Translation:The wallet on the table disappeared.
Not really. "De pe" is there because (de pe) masă is not the direct object denoting space but an attribute. Although it is true indeed that you can use "pe" if you say "portofelul este pe masă" (the wallet is on the table) this is not true in our case. You can think about it as describing the wallet. "Masă" is not used as to denote a place anymore but rather as a way of identifying the wallet. The wallet that was on the table is not there anymore. We clearly identify the wallet. Moreover, in this case "de pe masă" refers to one single wallet being on that table by contrast with my example ("portofelul este pe masă) where this could be one of the many wallets on that table.
de pe masa - that was on the table (the wallet of the table-as it is that the table posseses it) pe masa - on the table
The real translation is "the wallet which was on the table disappeared". I am Romanian. I live in Romania. I have tried this just to see how accurate Duolingo really is.