"They are fish."
It would be better as "Essi sono pesci." But Italian frequently drops the subject pronoun, so just "Sono pesci" is the most common way to say it.
In Italian, "essi" is generally used instead of "loro" when talking about non-humans or objects.
In these kind of phrases, like the famous "I'm an apple" in Dutch course, I see it like they're talking about a play were people act like stuff. Animals, food, whatever. If this what the case and there is a group of people acting like fish, would it be "loro sono pesci" or would you use another word?
Thanks in advance.
If that were the case, then yes, since you're talking about people "loro" would be the appropriate pronoun. But the subject pronoun is generally optional in Italian, so regardless whether you're referring to actual fish or people dressed up as fish, you can never go wrong with just "Sono pesci".
And before you ask, this sentence here is referring to actual fish.
According to f.formica, course contributor and native Italian speaker:
I wouldn’t accept “loro sono pesci” because it feels too unnatural to hear: it might work with something like “loro sono i miei pesci” - if someone was showing off their aquarium.
Therefore the best translation is simply "Sono pesci".
It seems from the discussions above that there used to be a word for 'they' called either 'esse' or 'essi' for female / male type words that do not refer to humans, which have since fallen away.
Now they just drop the word 'loro' if it is not referring to an object or animals.
It's true that "not preferred" and "incorrect" are not synonyms, but there is overlap. At least one of the volunteer course contributors is a native Italian speaker, and he has confirmed that "loro" is only for people. If anything, it would be "Essi sono pesci", but it is far more common to leave the subject pronoun out entirely, and that is what this lesson is teaching.