"We agreed that we let it go."
Translation:We hebben afgesproken dat we het loslaten.
If it was a type what you hear exercise you can only use we here due to the difference in pronunciation.
If it was a translation exercise then please report this using: https://support.duolingo.com/hc/en-us/articles/204728264-How-do-I-report-a-bug-
You should not get this sentence as a translation exercise from English to Dutch.