You are right that 'Usa' is third person singular form but same form is also Usted form along with Él and Ella form.
Usted form of verb is used for formal conversations. Here word señor means this is formal conversation.
'Usas' can be used in non formal conversations with our friends or family members.
A Spanish speaking friend of mine did say that some people will take the incorrect use of Formal and Informal as insulting. However if the person knows that you are not fluent in Spanish they will understand. If they think you spoke that way on purpose, they will be offended.
I can imagine certain situations where it could be used as an insult but I think more of us learning Spanish are more unsure of whether we can use the informal forms with people we just recently met and hope to be friends with.
And I wonder how that varies from place to place. I imagine that much like the US and England are separated by a common language, probably Spain and Argentina are as well.
Spanish has two forms of the second person, you. There is an informal 'you' and a formal 'you'. When the formal 'you' is used, like in this sentence, the verb is conjugated just like it is for the third person (he/she/it). The use of 'senor' (with a tilde on the n - can't do it with this keyboard!), which means 'sir', clues you in that the formal 'you' is being used.
The translation is indeed correct. The Spanish simple present can be translated three ways.
Usa - You use / You are using / You do use
The most likely way to translate this question is are you using...? or do you use...?. Your translation isn't wrong, just a very uncommon way to phrase a question in English. Your question would be a question of disbelief. You can report it, but don't be surprised if uncommon translations aren't in the database yet.