You might perhaps already know this, but I’m adding a link to this thread as an additional explanation to this construction.

We do get that complaint occasionally, and it's equally problematic regardless of solution. The issue is that usage varies a lot among natives here. To some, like you, just using "lying" is plain incorrect. To others, it is perfectly fine. It doesn't appear to be a one-side-of-the-Atlantic thing either - for instance, Cambridge and Merriam-Webster both accept "lying" on its own like this.

I completely understand that this is frustrating, but it's better from a user perspective to allow both, since that means people will at least not be marked wrong regardless of which they prefer.

The ligger och construction, like its siblings, is a way of expressing the continuous tense Swedish lacks. As such, just plainly "they are sleeping" is by far the best translation. This is also the reason "they are lying asleep" is not accepted - that would correspond to a different construction in Swedish, e.g. de ligger sovande(s), which is not typically a naturally occuring phrase.

Obviously, you are absolutely right in that "they are lying and sleeping" is a pretty bad translation into English, horribly unidiomatic.

The problem here, however, is the reverse translation. Duolingo chooses for the "translate into Swedish" exercise whatever is chosen as the default translation for "translate into English". Hence, if "they are lying and sleeping" is not the default, then you will never be asked to translate into de ligger och sover - and the same goes for all similar continuous expressions, since e.g. "they are asleep" is always strictly better as just de sover.

I've given quite a lot of thought to how I would prefer teaching this on an hypothetical enhanced platform, and I have a few ideas - but unfortunately none that are implementable under the current system.

So, in summary, I agree with you. I think your criticism is very valid, and appreciated. Given the restrictions of the teaching platform, I think this is probably the best compromise - but I'm open to the possibility that I'm in the wrong.

Yes :-) Very good!
Maybe should a conversation between friends be a bit less formal.

Möjligen skulle en konversation mellan vänner vara lite mindre formell.

"I try to put this in my live: Telefonen ringer, jag svarar i telefon[en].

-Correct, but In this example it should be be "telefonen". THE phone. your phone.

Or just skip redundant info, like this:

THE telephone rings and I answer.

"TelefonEN ringer och jag svarar."

"-Hej, detta är Boddason." "Hej, detta är Carl. Kan jag få prata med din fru?" "Nej, hon ligger och sover." Har jag greppat det rätt? "

Ja :-) Jättebra!

Or someting like this:

"Telefonen ringer och jag svarar, -Hallå det är Boddason, -Hejsan det här är Carl Carlsson, skulle jag kunna få prata en stund med din fru? Nej tyvärr, hon ligger och sover just nu, skall jag hälsa henne att du har ringt? (No im sorry, shes sleeping right now , should I tell her that you did call ?)

The problem is basically that whatever is chosen in the admin interface as a default translation is what you're shown when asked to translate in reverse - from English to Swedish. What this means is that if the way more logical "They are sleeping" is chosen as a default, there's no good way of teaching the translation of the continuous into Swedish, since De sover is much closer to that in isolation. So it's an unfortunate byproduct of a system which does a lot of things really well - but not this one at all.