Translation:Why is there nobody in the classroom?
"人人" is better translated in most contexts as "everyone", though it could be thought of as "people" meaning "all people". It wouldn't fit in this sentence at all, as far as I know.
Duo's sentence could indeed be translated as "why are there no people in the classroom".
It's widely held that when you have a plural noun or noun phrase (e.g. "people") with "there", you have to have a plural verb, "are": "there are people"; "why are there no people".
Colloquially many (probably most) educated speakers often use the contraction "there's" with a plural even if they'd always say "there are" when not using a contraction, but it doesn't really work in inverted form.
Some linguists/grammarians might say "is" is okay, based on common enough use, but Duo's probably not going to give you any leeway.