"This is the better submarine" was marked incorrect. Does καλύτερο only mean better when it is the predicative position? (as opposed to best when in the attributive position as it is here?). If so, how would one say "this is the better submarine?" While the use of the comparative in this case is somewhat awkward English, it would be correct if it were in answer to a question such as "is this the better or worse submarine?" or "which of these two submarines is better?"
Greek does not distinguish between "the best" of many or "the better of the two". You could only, as you point out, use "This is the better submarine." if it were known that we are comparing two submarines. As there is no context here we use "the best".