The word "it" here is included in the verb - you know the way the subject can be included within the verb conjugation itself. Lo can't be used here because it is not a subject pronoun, just an object pronoun. Es bueno - it is good (the word it being implied by the verb conjugation and context, if there were any). Lo mueves frequentemente - you move it frequently, with the you subject being included in the verb and lo signifying the word it, but only as a direct object not a subject. There is probably a much more succinct way to put this, but I hope this helps anyway.
Maybe "Wasn't my intention." The verb, carrying both the subject and the tense, is still there.
Whether you regard "it" here as a real thing or a phantom subject doesn't really matter. In Spanish you can (almost) always leave out the subject pronoun and it's still grammatical. And a subject pronoun for "it" is (almost) never used.
"[If you're] talking about an event, [..] the preterite typically is better. If we were talking about inherent characteristics, era would typically be better. So we might ask, ¿Cómo era tu profesor? because then we'd be talking about inherent characteristics (unless, perhaps, if the intent of the question was to ask whether the teacher had a bad day). I'll have to think about this a bit more — the distinction isn't always clear." http://spanish.about.com/od/usingparticularverbs/a/era-fue.htm
But even on that resource, a lot of contention..
http://www.glossophilia.org/?p=416 - this explains some differences.
"Intent and intention share meanings and overlap in use, but they are not completely interchangeable. Both words mean "the thing that you plan to do or achieve : an aim or purpose." Often they can be used interchangeably: She thinks I'm trying to make things difficult for her, but that's not my intent/intention."
I translated it as "I didn't mean to," which is a more casual version of "It was not my intention." I've heard the phrase most often when somebody bumps into somebody accidentally -- it's equivalent to "Excuse me, I didn't mean to do that." One time a friend of mine who mostly spoke Spanish bumped into an English speaker, so he said "It wasn't my intention." It was literally correct, but it sounded odd -- English speakers usually say "Excuse me," "Sorry," "Oops!," or something along those lines.. Of course, my friend could have said "Perdón." Anyway, my answer was identified as incorrect, since it wasn't a word-for-word translation. That's why I was reminded of my friend.
You're absolutely right in that your friend's literal translation of the sentence didn't quite work in English when bumping into someone, but as the original here is in Spanish, and we are translating it into English, presumably your friend wouldn't have used it in the same context in Spanish, but it must have another context, as it does in English. Don't forget that this is a computer website and its 'brain' can't cover all eventualities.