My thoughts exactly. If you "peek" at the word "dão," it says "give" or "have."
the meanings of "to have" or "to do" are only for very specific contexts. In general the meaning of the verb "dar" is to give.
Then why put have as an option in the translation if not suited to this sentence.
Duolingo's hints normally give the common translations for each word, regardless of the sentence they're in. Usually, the top hint is the most suitable for the sentence.
In English we do not say, "give lemonade", except maybe in the case of "oranges don't give lemonade" type situations. We might say, "They don't give out lemonade." which could be because they don't have it or maybe because the sell it rather than "give" it.
I don't know why English speakers think every translation has to literally mean what people think its English equivalent would be. If so, this language would not be Portuguese. As non-native speakers we have to use a little reading comprehension and context. Maybe they HAVE lemonade but don't want to GIVE it to you...
"They don't do lemonade", I tried. This is what people say in English when a place doesn't serve lemonade. Is this what the sentence means?
It's not an idiomatic expression or anything like that, but I wouldn't say it's completely nonsense - it makes sense in the correct context. The meaning is what jonthedrummer and Lingledingle said.