Teu chapéu parece bobo.

English Translation

Your hat looks silly.

Why is 〝seu〟incorrect?

Every cloze only has one “official” answer, even though there may be other equally valid answers. So I wouldn’t use the word “incorrect”.

By the way, I had expected the possessive to be preceded by the article, “o”.

English Translation

Your hat looks silly.

When I tried this question for the first time, I chose 〝seu〟and it wasn’t correct.