The traslate method returns blank when there is
XML file below
Yes, this seems to be a bug, see https://andersnordby.wordpress.com/2014/08/29/episerver-cdata-bug-in-language-files/.
If you can't simply delete CDATA, I'd suggest you contacted EPiServer support or file a bug report. You might as well create your own Translate extension, but I would suggest the former path instead.
Link to bug