If 'Ubi' can mean both 'Where' and 'When', does that mean that in a sentence such as this, without further context, it is impossible to unambiguously specify which one it is?
In this particular sentence there is no ambiguity, because in questions "ubi" always means "where".
To ask "when does Marcus sleep?" you would say "quando dormit Marcus?"
Yes. If it isn't accepted, please report it. Since the course is in beta, there are still various glitches like this, and it's helpful to the course creators when users report them.