"He is poor as a church mouse."
Translation:Li estas malriĉa kiel preĝeja muso.
The rule is that you can combine two or more nouns together into a new compound noun, if the new word makes sense and would be understood by others. It's very similar to English. In English we combine church and mouse into churchmouse, and in Esperanto we have:
preĝejo + muso = preĝejomuso (or preĝejmuso)
Another example you'll find in the course - in English we combine rain and bow into rainbow. In Esperanto we have:
ĉielo + arko = ĉielarko (a rainbow, or literally a 'sky arch')
You may notice the -o in ĉielo is dropped when it becomes ĉielarko. In Esperanto, we usually drop the first -o in a compound noun if the word is easy to pronounce without it.
So, if it's two separate words it should be preĝeja muso because preĝeja is an adjective describing the noun muso. But the system thought you were trying to create the compound noun preĝejomuso and just had a typo, so it marked you correct.
Hope that helps :)
It's not grammatically correct. Kia means "what kind, what type", which doesn't fit here. Your sentence would mean something like "He is how poor what kind of church mouse".
You can either use the estas tiel ... kiel ... construction here or use estas ... kiel ..., with the tiel implied.
Also note the spelling of malriĉa - don't forget the ĉapelo!