Translation:How about a bag like this?
No, that's not true, katakana isn't only for foreign words, it's also if the kanji is hard to write, which is why 鞄 isn't very commonly used. It can also be used for other reasons which I am not entirely sure of, but かばん is just one of those words that can be written in more than one way.
The general distinction is that こんな means "such a ..." or "a ... like this", and is used to describe a noun, while こんなに means "like this" or "in this manner", and is used to describe adjectives. E.g.:
こんなペンがほしい ＝ I want this kind of pen.
こんなに早く起きたくない ＝ I don't want to get up this early.
It can lead to subtle differences like:
こんな かわいい かばん = such a ~/ this kind of [cute bag].
こんなに かわいい かばん = a bag that is [this cute].
My guess is Duolingo's software is not equipped to handle multiple ways to transcribe the audio — some sort of 1:1 relationship in the database. Japanese is a very odd language in having three writing systems :-)
I've noticed this issue on a lot of the transcription questions. Likely it's a feature request on the backlog somewhere that they haven't gotten to yet.
Not sure why they favoured the katakana カバン over the kanji, though, particularly given that they're teaching the kanji in the same lesson.