The portfolio is purely just whatever type of creative and/or technological work you've done. This can be stuff from your free time or for school. But, making a functional game shouldn't be too hard if you just follow a few tutorials. "Fully functioning" means just a simple proof of concept that works enough to show that you have what it takes to at least commit to a project. This shouldn't take more than 40 hours total.
Game development can be hard, but the intake assignment is meant to see if you have the drive to teach yourself enough to show you are 1) able to learn new technologies and techniques and 2) can creatively develop a concept. If this intake assignment is not possible to you, then maybe the program is not the right fit for you.