The problem is both answers are correct. I can take 0 and move it to the beginning and get the same answer as taking 2 and moving it to after the 0.

Yes, "0" is the smallest digit in 209917, but's not the point in here. You start with 209917 and having that number you can move one of its digits from one place to another to create a new, smaller number. So here you pick a digit 2 which in the given number stands at index 0. You remove it from the number resulting in 09917. And then you place it back but this time at index 1. Which gives you 029917. Which is basically 29917.