Un + altro = un altro
There is no change. You don't just put any two words together with an apostrophe. E.g. you don't say Io'sono una'donna :) Un and altro are fine separately.
Una + altra = un'altra
This happens because "altra" starts with a vowel, so the article "una" becomes "un'"
Duo thought when you wrote "un'altro" you wanted to choose feminine gender, and "o" was just a typo, so it warned you to check the genders (posto is masculine)