Translation:The teacher is not home.
I think Duolingo is not contacting words. By that I mean Duolingo is not able to figure out that "is not" is equal to "isn't". My answer was exactly the same with yours apart from the contraction. I put "The teacher is not at home" and it was accepted which means the problem is with the "isn't" versus "is not". I hope they will update this soon. :)
The teacher is not home is incorrect. The correct sentence should be "the teacher is not at home". The preposition at was not provided and I use about because the sentence was not correct. My sentence wad not correct either, but what you give as correct answer is incorrect.