It always amazes me how close the versions of English are in the USA and the UK, but how we still manage to confuse each other. The two-volume Oxford gives us "a small, secluded or secret room; a water-closet". The Prime Minister is closeted with the King means "in a private meeting with". Where's Gran? She's in the closet, means Gran has gone to the bathroom, American style, i.e, the toilet.
Don't say "closet" in England. It's a wardrobe. In Ireland, you put your underclothing in the "press" (chest of drawers). Don't ask.
I don't think I have done that one. I don't know why "clothes" was not accepted there. I cannot think of a situation where "garments" would be correct and "clothes" wrong". If you get that sentence again, I suggest you try "clothes" and if it is marked incorrect, click the "Report" button, then "My answer should be accepted".