My experience has shown the new 'Translate' option for Team conversations and chats (which is awesome by the way) does not work for a Teams' guests. This is a very common use-case when guests can be invited into a Team when they don't share a common language.
I also came accross this issue. We invite guests that speak different languages and for some of the messages, that have been typed in channels, it would be very useful if these guests could use the translate feature. Is there any news on this?