No here you are wrong, the reason that you have the option ON or OFF is that if you want the game to work as you mentioned you have it ON, if you don't want to see that translation you have it OFF.
If it is as you say then you have no reason at all to have that option to set it On or OFF!
It worked as i say before game version 1.23
It work like I said since my second playthrough in December when I set subtitles on "OFF" (since 8 months in all the version since release).
So in my game, if I set subtitles on "OFF", yes, all the subtitles are diasbled... Except when it's a foreign language is speaked (whatever the language), in this case subtitles appear. My game is in French, they appear for Saburo/Yorinobu in Japanese, for some words in Spanish for Jackie/Mama Welles or for some dialogues lines with gang members (spanish/haitian/russian/Japanese).
CDPR have certainly suppose that if my game is in French, I don't understand Japanese, and they were right
And it's for that reason, there the original language who appear first, quickly replaced by the translation in your language.
So maybe your game work differently, I don't know
But anyway you could report it, you will see if CDPR consider it like a "bug" or "work as intended".
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