It's an old myth, "the holy Grail" is "a dish, plate, stone, or cup" in the stories about King Arthur (British). According to legend, it has special powers, and is designed to provide happiness, eternal youth and food in infinite abundance. Monty Python made a funny movie with themes from these stories.
I have to imagine it's on purpose. On the American keyboard layout, "I" and "O" are next to each other so as long as that's the only mistake in the answer, it accepts it. I believe if you had a 2nd mistake, it wouldn't work. For example I don't think it would count "N
t.", but I do think either "N
o läser." or "Ni läse
t." would be counted in my experience.