Translation:He is a teacher.
In the "type what you hear" section, allowing both 她/他 makes sense.
My options were 他 and 她们. This shows me that they want you to think about your answer.
If one is typing versus using the bubble selection and the gender is unknown, defaulting with 他/他们 is what one should do if the gender is not specified.
If you hear the sentence 他是老师 out of context, there's no way you can tell if the teacher is male or female cause it's pretty much the same word and tone (tā). On the other hand, when you read the characters, the pronoun changes from 他 (he) to 她 (she)... but it's not really gender related cause 它 (it) is also the same word and tone "tā".
To make a complete sentence in English, you need the article "a," so no, can't be correct. Translation between languages does not work in a word-by-word or type-by-type manner, because languages have different characteristics and it is not possible most of the times to translate exactly the same meaning. The baseline is, the translated text has to be gramatically correct.
I don't really know, but I just tried to translate them individually on this site http://www.systranet.com/translate/ and 老 translated as "old" and 师 was translated as "teachers", and 老师 was translated as "teacher". So the characters do mean something on their own, but I think it would be best to use both to mean "teacher" if that is what Duo is teaching.
For anyone coming here confused about he/she/it, they're all the same in Mandarin, no way to tell, and it's not the only language like that, Persian(Farsi) has that too, او means both he/she, (though "it" has it's own word) Idk any other language that does that, but I'm willing to bet those aren't the only two, and yes, even native speakers don't know if "ta" is a female or male, (not a native speakers, but same situation in Farsi)
Unless I'm missing something, the first character is now understood to be masculine as its left half is the character for "man". Even though Mandarin may not have had gender in the past, at present, the first character would need to have the left half be the character for "woman" in order to translate as "she".
By default, 他 is gender-neutral, although the probability it's "he" is usually higher. Please check my post to learn more about 3rd-person singular pronouns in modern Chinese: https://forum.duolingo.com/comment/25690890?comment_id=37429005