Translation:You are American.
To me it makes sense. To better understand Chinese, you need to process it literally, and learn the logic behind how the sentences are read. Duo doesn't do that for you. You should be learning whats it means classically in your language, but also how it would be translated literally in your language.
No, that is a different meaning which can replace "You are all American.", but it does not replace "You all are American." which is a regionalism to emphasize that "you" is plural.
Putting it in front of "American" means "all American" which means that the person is not partly another nationality.
"You are American." should simply also be allowed as correct and the reverse should allow both singular and plural forms. That is what the other languages usually do.
Further down, someone says that "You are Americans." is accepted and that is a reasonable and good translation which assures that the plural is known and still uses a common form of the pronoun.
English does not pluralise adjectives. And nationality can be an adjective, so American in the singular should be accepted. You would not say you are bigs just because you are talking to a group! Nor would you say you are Americans people. The closest translation is You are American people, but it is usual not to bother specifying people in English. You are Americans is using an English noun in place of the Chinese adjective and while it conveys a similiar meaning is actually further from the Chinese than You are American is. Best to accept both.
Except that in Chinese a noun is used also and not just an adjective, so it actually makes good sense to say "You are Americans." which means "You are American people." Try reporting your version since they accept "You are British." though that was a singular sentence and they do want to test if you know this is plural.
“You all” or “y’all” is a southern US English variation for plural “you” that Duolingo often accepts to help people learn that the other language form can only be plural. This does mot indicate “all” as opposed to “some”, but indeed in English to mean “some” we would have to specify. Did you report “you” as also correct for plural form of you if it was not accepted as correct?
Unfortunately, when you translate to English, we do call ourselves Americans, and so what if it is inclusive. We are all from the same set of continents!
You could try reporting your answer as also correct the next time you spell it right. If they add it, then skipping the e on “the” would then be a typo.