Translation needs phonetic transcription to handle proper names. If there are words that may or may not be proper names depending on context, machine translation will guess the context wrong at least some of the time and phonetically transcribe what should be translated, or translate names that should be transcribed.

The problem also can also happen when translating from English, if you think about all the surnames that are occupations, or names like "bill" or "lily." Capitalization usually helps disambiguate, but there's title case and all caps and people who never capitalize anything...