Because αυτή έχει means "she has".
The lesson does not have the form "she's" in it, but Duolingo unfortunately sometimes automatically creates contractions even when they are confusing.
"She has" can contract to "she's" in a sentence such as "she has told me already = she's told me already" -- but not usually in a sentence such as "she has a lemon" which I don't think many would say as "she's a lemon". Unfortunately Duo doesn't know about these finer points of English grammar so you might see "she's" for "she has" sometimes.
It does not mean "she is" in this sentence.