It's terrible English. Like you, I put "a long way" - which isn't great but is better than "far away". "A bear sees far away" means that the bear, being far away, sees something. Gobbledegook. Duolingo could easily have come up with more natural yet challenging sentences than this (and many others). Still, I keep reminding myself that this is a free app, for which I'm very grateful! (grovel grovel)
2017/07/14 AUDIO: "L'orso" sounds like it has three syllables.
Aside to the people complaining about the English phrasing: it doesn't matter if it makes sense or is something you would say in English. The object is to translate the Italian into English, and lontano == "far away".