Exactly! On means we, one, people. It does not mean you. So, if one did not check tu as a correct answer, then one should not have been marked wrong. On y va means let us go. It does not necessarily signify let's me and you go, even though on may include you. I think tu should not be included as a correct answer. Ok?
I think this is in reference to the first practice question in this lesson. I also did not choose the option that implies "on" means "you" in English. I think "on" actually means "one" here, but English speakers often incorrectly or colloquially say "you" in place of "one".
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