"How are we?"
So based on the information added by UluwehisKo and especially kelii.... would it not be more appropriate for this sentence be "Pehea kākou."? Keeping in mind what kelii.... I think is saying, you wouldnʻt really use the sentence "Pehea kāua." in a one on one conversation. On the other hand might you use "Pehea kākou." to address a roomful of people? What do you all think?
Unfortunately, translations between Hawaiian and English are not always possible to do and still be grammatically correct, semantically correct, and contextually correct. One or more of these would be sacrificed here and there, and hopefully the comments and the notes will explain the missing or ambiguous info. In reality this question would not really be said. When would you? Why would you not know how you yourself are doing? Thus, you can file this question away and forget about it.
There are other similarly strange prompts in other languages here on Duolingo, such as The ant reads a book (Portuguese) and The whale drinks the water (Italian). It is kind of what Duolingo is known for.
Well strange sentences may be a DL hallmark, but the program is teaching grammar not conversational/travel tips. UluwehisKo's concern is about grammar not usefulness. DLHawaiian could do something like "How are we? [you & I]". and "How are we [all of us]?" to let the learner know what they are looking for.
I agree that learning the proper grammar of the Hawaiian language is necessary for any person seeking to learn. However, I would add that duolingo would exponentially increase it's reputation by asking native speakers of every language to simply give the more casual phrase that one would use on the streets. It would be extremely simple to color coordinate the difference between proper speech, casual, and even slang.
Lots of interesting comments about this question, and--BTW--Pehea kākou ia also accepted by DL. I just tried it.
As to when (or if) this question is ever actually asked, it is very common among Niʻihau speakers with either kāua (speaking to one person) or kākou (speaking to more than one), but it's part of the longer phrase: Pehea mai nei kāua? or Pehea mai nei kākou?
However, Niʻihau speech is generally quite fast with many phrases and/or words sounding shortened, and the second K in kākou would always be pronounced as a T (kātou). So in casual conversation, this phrase tends to end up sounding something like: Pemine kātou?
Kala mai. If you're just beginning to learn Hawaiian, this is probably a lot more than you're interested in knowing at this stage, and you will most likely not be conversing with any Niʻihau speakers anyway. So this was just intended to point out that the question actually is used by native speakers even today.
What is the nuance of this sentence? Is it something that's said when we are happy/anxious/what? Is this a greeting?
The nuance or context is really not clear, except that it sounds like something 'Ekela would ask. no shade, just saying :) Pehea 'oe? is what is usually said, but if you want to include the person you are speaking to in order to make it more intimate (?), then you can ask this, I guess.