Translation:They are all sleeping in the room.
That's what I thought, too. When I pick around on google translate though, it SEEMS like it's the 觉 that makes it translate to the progressive tense, and the 在 doesn't even matter?
I know, google translate isn't always super reliable. If any native speaker is around, some clarification would be great!
I can't see what you're seeing re: tips, but my guess is that it was refering to a larger structure of a sentence where it got negated somewhere else? I am not a native speaker at all, so take this with lots of grains of salt, but. I think if you say 他们都 in a positive sentence then it's "all of them", and if you use it in a negative sentence then it's more natural in English to say "none of them do the thing" than "all of them don't do the thing."