Yes, I started a discussion topic on this and apparently the verbs can be split: https://www.duolingo.com/comment/11590244$comment_id=11591502
There are several verb tenses that require a helper verb to convey the intended meaning (aka compound tenses). For example: I am eating, I have eaten, I had eaten (estoy comiendo, he comido, había comido).
In Spanish, the general rule is that you cannot separate (or split) those two verbs with another word such as a pronoun. This sentence (Están ustedes comiendo) is an example of an exception to the rule (ustedes comes between, or splits, the two verbs Están and comiendo).
I think that for most of us trying to learn the language, it would be best to stick with the rule and not split the verbs, for example: ¿Ustedes están comiendo? or ¿Están comiendo ustedes?
"Ustedes" does not really mean "you all". It just means "you", plural, formal. If you had a group of five people, and three of them were eating, you could say "Ustedes están comiendo", even though two are not eating. DL should stop pretending that "ustedes" translates to "you all".