Says that correct translations are "hello" and "hi", but then tells you that the correct answer is "bye", even though it has not taught you that translation yet.
The point is that the correct translation here is 'bye' or 'goodbye', but that hasn't been taught yet. As far as the duolingo learner is concerned, 'ciao' only means 'hello' at this stage.
Ciao means both "hello" and "bye". Nevertheless in this sentence it wouldn't make sense to say "Hi" after saying "Thanks". Therefore, by context, you deduce that it means "bye".
Nothing terrible. I think that the idea behind this is that mistakes teach better.
Both use for hello and bye but it depend on situation wether you comming or leaving. If you just came or started conversation its mean hello and when you closing conversation ciao mean will be bye for sure.
Do you pronounce grazie "grazi" or "gracia" such as when you say thanks in Spanish "gracias"
I was informed by a native Italian that all vowels at the end are pronounced. However this program doesn't.
Where are you not hearing all the vowels? They come across fine in the recording for "grazie, ciao".
Does "ciao" used in this context have the sense of "See you later"? If so you should explain it.