Level 31: Find mistake: Bacteria (lived) in the soil play a (vital role) (in recycling) the carbon and nitrogen (needed) by plants

=> This sentence has 2 verbs “live” and “play”, so we implicitly understand that in this sentence there are 2 clauses, written separately would be:
“Bacteria live in the soil. Bacteria play a vital role in recycling the carbon and nitrogen needed by plants”
=> sentences using relative clauses:
“Bacteria which live in the soil play a vital role in recycling the carbon and nitrogen needed by plants”
=> when reducing the clause, we have the following sentence:
“Bacteria living in the soil play a vital role in recycling the carbon and nitrogen needed by plants”