Why not "used to wear" instead of "was wearing"? Duolingo seems capricious in its preferences.
There are several viable answers for this exercise. Only one of them is shown as the featured answer. The others are accepted. There is nothing capricious about it. The simple preterit is less likely here. The imperfect fits better to describe the situation.
- She was wearing a red hat
- She used to wear a red hat
- She wore a red hat
That answer is also accepted but not every acceptable answer is going to be featured. Please take this into account when presented with sliding word tiles around. There are other viable answers.
In the listening exercises, is there an audible difference between "Elle portait un chapeau rouge" and "Elles portaient un chapeau rouge"? Furthermore, is it correct that in French "Elles portaient un chapeau rouge" can actually be understood to mean "They used to wear red hats".
"She wore a red hat" isn't accepted.
Without any context, I feel this should be marked as correct.
It's true that your answer also works, but consider the different possibilities between Imparfait and Passé composé. This explanation is the best one I have ever found: https://languagecenter.cla.umn.edu/lc/FrenchSite1022/FirstVERBS.html
what are the differences meanings for the uses ; would, used to, was ( were ) ing verbe
are it interchangeable ?