At first sight it is a confusing phrase. Look for the verb...
The conjugated verb is: "para", from the verb "parar", which means "to stop". It looks like the preposition "para" (for), but it isn't. So the core of this phrase is "¿este autobús para?" = "this bus stops?". Then all that is left is the adverbial clause: "en Madrid", which of course means: "in Madrid"
So that makes the translation: "Does this bus stop in Madrid?"
I think it is just coincidental the 'is this bus for Madrid' makes the same sense as 'does this bus stop in Madrid'. I never even thought of the verb 'parar'! So I genuinely learned something new. Thank you duolingo!