I've learnt many different things about this word, and I'm very confused by it. My Swahili course book (for Tanzanian Swahili) claims it means Miss (not Mrs), and that you can use it for example to young ladies at the market. Here it says grandmother, which I haven't seen anywhere else. In western Kenya, they stopped me from using it and said it's more something that you say to your wife. I'm very confused indeed.
I am sure, 'Excuse me, Granny!' should also be accepted. We often call our grandmothers 'Granny' - at least where I am from.
If you think your answer should be accepted, report it. They are slow at making changes at the moment due to being busy, but when they do get to stuff they'll be focused first on reports rather than comments.
Bibi also can be "Madam" and duolingo says it's wrong. I will report it.