"He loves her."
Translation:Lui la ama.
I made a simple clitics table
to help wrap my brain around the use of the pronouns.
In this case looking at the le row helps to visualize what you are saying :-)
It can do, but is not obliged to. And I suspect it mostly happens where the vowel that the pronoun ends with is the same as the one the next one starts with. As several people have already commented duolingo accepts Lui l'ama. I'm fairly sure that Ti amo for example doesn't go to t'amo. Though if a native speaker can correct me that would be fine. English has many cases where there is an elided version and a full version and both are acceptable. Isn't, wasn't, I'll etc. I suspect Italian is the same.