'quedar' is one of those words with many meanings ... check this site, which shows meanings from three dictionaries, and the third one has a listing that fits the definition used here. Still quite a stretch for Duo if two dictionaries don't show this meaning and the third one has it listed eighth, but at least it's there ... http://www.spanishdict.com/translate/quedar
Specifically item # 8 in the Collins Dictionary (the third one), which reads
8) [+ropa] (ser la talla) to fit; (sentar) to suit ¿qué tal (de grande) te queda el vestido? does the dress fit you?;
me queda pequeño it's too small for me;
no te queda bien ese vestido that dress doesn't suit you;
te queda bien it suits you;
no queda bien así/aquí it doesn't look right like that/here
Lingot for you! I looked at the hints and they were completely confusing; normally there are more options for a word with this many meanings.