Yes. The question asks where you are when you vacation.
Thank you Ms. Sue
There is something wrong with the way you have written the question. It has no verb. "te" is not a verb.
The question "¿Dónde te vas cuando estás de vacaciones?" is asking where you go when you are on vacation. In this case, the answer provided is "Yo estoy en Florida" which means "I am in Florida."