Yes. It is actually not so much about "looking at" something, it is about "looking clueless / helpless", it is more expressing a feeling like: "You have no clue, go do something". "Get your act together". Maybe there is a similar english expression? A literal translation as offered by Duolingo, is actually useless.
If I understand correctly, this would be used less when someone is being rude/wants to start a fight and more when someone is daydreaming. Please correct me if I'm wrong.
In this circumstance, I would say "what are you staring at? get back to work!" - I would not use "looking at", because "staring" has more emphasis on a prolongation.
By contrast, I would use "looking at" and "staring at" interchangeably if I wanted to start a fight.
@beerzoe, there is also a cultural thing about staring at people. In american/ english culture it is not "polite" or even "confrontational". In holland staring is more common and more a sign of interest. It is like watching television, people can be fun :) to stare at. And as a result in Holland people also speak to complete strangers.
If this was about my use of the word rude, I didn't mean it as 'trying to start a fight'. In the UK, we are always told as children "it's rude to stare", because the likelihood is that looking at someone for a long time will make them uncomfortable.
But I agree that "what are you looking at" can sound more confrontational!