Can also mean (with capitalised "Sie") "Are you learning German?"
If capitalised, yes.
Shouldn't "Do they learn German" be right?
"Do they learn German?" is one of the accepted answers for a translation exercise for this sentence.
Did you get a listening exercise?
I got it wrong on the translation exercise
Then I don't know what might have gone wrong.
The next time this happens, perhaps you could make a screenshot and upload it somewhere, then link to it in a comment so that I can see what you saw?
I have a translation exercices and on 04.01.2019 " Do they learn german" is not accepted.
Is "are you learning german" wrong?
Yes. Not only is “German” spelled wrong (you used a small g); it’s also not a correct translation of the German sentence. Lowercase sie cannot mean “you”.
(The polite “you” is Sie — always uppercase.)