"This place is too scary!"
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In simple words, 太 + adj. (+ 了) is a common expression for too + adj. The character 了 can be omitted, but I'm not sure whether Duolingo accepts the omission or not (if it doesn't, please report it).
I can't come up with an linguistic explanation for 太 + adj. + 了 structure. Personally I think 了 is actually a wide-spread phonetic loan. The real character should be interjection 啦.