"No, those machines are not good."
Translation:Ne, ty stroje nejsou dobré.
Stroj Is a masculine inanimate noun and the adjective (dobrý) has to match the ending with it. So you get masculine inanimate nominative plural ending "dobré".
The sentence "Ne, ty stroje jsou nedobré" was marked incorrect. Is it incorrect to negate "good" instead of "is"?
It's very, very unusual. Nedobrý (though such a word exists) sounds kinda Newspeak-ish, like English 'ungood.' You should negate the verb instead.