If it has to be live (i.e. works in real-time), doing the translation in a server elsewhere is probably a bad idea due to the latency.

It makes more sense to run an optimised translation model locally - ideally in the AirPods directly but if not, on the connected iPhone.

I have some buds that do this and you have the ability to download languages for offline use and those work just fine.

Apple could do the same. They may not, but this is one of those features that needs offline use more than others. Some remote village where no cell towers exist, underground where no cell towers or satellite can penetrate and no WiFi exists, indoors where cell towers are difficult to penetrate and WiFi is not always an option…

Hopefully they will.