Translation:They saw it.
If you mean the hint "saw it" attached to lulegh -- remember that hints are only weakly sentence-specific.
The hint "saw it" is appropriate as a translation of lulegh in a longer sentence such as lulegh tlhInganpu' "The Klingons saw it."
But if lulegh. is the entire sentence, you cannot translate it as "Saw it." -- that is not a complete English sentence, as the subject is missing.
Hints are not "recommendations" or "suggestions" -- they do not say "this is the correct way to translate this word in this sentence".
No. Recommendations are trustworthy and show you the way.
Duolingo's hints aren't reliable enough because they often contain translations that are not appropriate for the current sentence.
If you say that "Duolingo recommended that I translate 'A' with 'B'", then you've misunderstood how hints can be used.
Perhaps you can try answering your own question.
If you need a hint, refer back to the tips and notes for the very first unit "Useful phrases" aka "Phrases" https://www.duolingo.com/skill/kl/Useful-phrases/tips-and-notes -- specifically to the section "Verbs".
Have a look for "If the subject is third person (he/she/it/they) and has either no object ...".
If you haven't started doing so yet, please always read the tips and notes for any new unit before you start it.
They're a bit hidden, behind a lightbulb icon, when you select a skill on the website:
In the mobile apps, they're mostly not available. (In my opinion, this make the mobile apps unsuitable for learning a language on Duolingo, though they can be useful for practising units one has already learned after reading the lesson notes.)
No -- the prefix lu- shows that the subject is "they" and the object is "him/her/it".
It can't be used if the subject is "they" but the object is "them" or if there is no object -- in those cases, there is simply no prefix.
So "they saw" would be legh -- which could also mean "he saw" or "she saw it" or "they saw them" or various other things. So to make things clearer, you might say legh chaH "they saw".