Translation:The butterfly flies.
Syllables ending in ㄹ are a special case for the -ㅂ니다/습니다 conjugation rules. When the verb stem ends in ㄹ (like 날-), you drop the ㄹ and treat it like it ends in a vowel instead.
im not korean so don't take my word on it but i think when the last consonant is a ㄹ it's dropped and then you just add the -ㅂ니다 to the 나 to get 납니다 like you'd do if there was no ㄹ and it ended with a vowel. you can probably find videos on this on YouTube though
So, in English, an insect that flies is a 'fly', in Korean, an insect that flies is a 'butterfly' :D
I'm pretty sure "the butterfly is flying" is acceptable too, but Duolingo is not accepting it.
Korean has a distinction between continuous and non-continuous tenses. 나비기 날고 있어요 - the butterfly is flying
i think it's because since there's a 가, that means you're not talking about butterflies in general, and since there's no 들 you're not talking about multiple butterflies so therefore it's butterfly, singular