Translation:Is it an asteroid? No. It is a meteor.
The Klingon is referring to something being observed by the speaker and the listener. English often used "that" in such a case even though Klingon doesn't have a word which directly translates as "that". Thus it is not unreasonable to translate Klingon 'oH as English "that" in such a circumstance (or even "this" if the person were holding it near the 'oH.
However, I think you are right that having it in the "best" translation could be confusing, so I have demoted it to "acceptable".