With the ubiquity of computing technologies, adolescents are increasingly affected by algorithmic biases. While previous work provides insight into adolescents’ perceptions of algorithmic bias, few provide guidance on how to engage adolescents in discourse on algorithmic bias that prioritizes both their agency and safety. To address this, we developed and conducted group discussions and design activities based on three scenarios of algorithmic bias with 15 adolescents of color (ages 15-17) in a summer academic program in the United States targeted at students from low-income backgrounds or who would be the first in their family to pursue post-secondary education. When sensemaking, all participants considered factors beyond the scenarios, using their situated knowledge to contextualize perceptions of unfairness. They also considered sources of bias and impacts of unfairness at different levels of individuals, communities, and society. However, when designing solutions, they tended to design for hypothetical ``average users'' instead of considering nuances of user populations. We offer insights for algorithmic fairness learning experiences that support situated reasoning in adolescents.