It should, you can report that! There's lots of phrases with the -ing form that get labeled as incorrect even when they shouldn't because Finnish doesn't have a continuous case and you can't see from these phrases which one you should be using unless you are really fluent in both languages, and sometimes even that doesn't help.
That would mean "I am dance". To put it shortly, the way ENGLISH grammar works in the given context determines whether the -ing form is used or not. Finnish is not particularly interested in ings. Check here: https://www.duolingo.com/skill/fi/family/tips-and-notes