Translation:The naughty, fluffy dog eats two lörtsy.
"dog eats" and "dog is eating" are roughly equivalent. "Is eating" is flagged as incorrect.
Actually they are not. Simple present usually indicates habitual action while continouos present usually indicates action that is happening at the moment of speaking/writing. A dog can't habitually eat two lörtsy unless they are so massive that they will last a long time. Which brings me to question why the translation uses simple present.
Thanks for the elucidation. Note that I qualified my comment with the adverb "roughly"; following this reasoning: Duolingo is not an academic environment. I presume that students are primarily interested in acquiring practical communication ability within social spheres. To revert to my point, and by way of example, if I were to communicate the actions of a naughty dog, perhaps my very own dog, to a friend, i would most likely say "Dude! The dog is eatin' ma lörtsy(s) - as we speak!".
The context and intended audience of dialogue is worth considering.
I agree that they are very much different but one of the earlier lessons said that translating Finnish present into English simple present or present continuous is dependent on the context of the sentence. In this case, the answer "the dog is eating lörtsy" seems far more likely than "the dog eats lörtsy". I'm guessing that not allowing the present continuous as an answer is a mistake rather than a deliberate choice unless there are some sort of indicators in the sentence that specify whether the answer should be simple present or continuous present.
Red Fox, the Finnish online dictionary, has "two lörtsys" for "kaksi lörtsyä". https://client.redfoxsanakirja.fi/en_US/dictionary/-/s/fin/eng/kaksi%20l%C3%B6rtsy%C3%A4