Apparently, there are some "bugs" yet to be worked out in the new, supersized Duolingo program. I translated the Spanish sentence as "I am eating in the cafe." The computer generated response gave me credit for a correct answer but cautioned me to "Pay attention to the accents: I am eating in the café."
The words "estar" (to be) + "gerundio" (gerund) are how you write a present continuous tense in Spanish. For example, "Estoy comiendo una manzana. " means I'm eating an apple.
You forgot "en".
I think you are spoofing, and that is OK.
Still, your interpretation shows how one can do literally-correct translations when disregarding context. Thus, you could say "I am eating at the brown" and insist it is correct because café can mean brown. It is a fun game, but not useful for actual translations.