"I prefer sitting to standing."
Translation:Mi preferas sidi ol stari.
"I prefer sitting to standing / Mi preferas sidi ol stari" does not equate to "I more like to sit than stand / Mi pli sxatas sidi ol stari." The problem here is that "prefer" and "like" just aren't the same words. In the examples given, both are valid sentences, but the meaning just isn't the same and I think you should remove "mi pli sxatas sidi ol stari" from the list of examples that should be selected.
Yeah, I think it does work with gerunds, but the course generally only accepts answers that are derived from content presented in previous lessons in the Duolingo course. It'd be really awesome if the Duolingo system could accept all appropriate answers, but that kind of spell-/grammar-check system is a long way away, lol