Yes, they will technically translate the game (edit: Wait, you tricked me! they won't translate the game if they need the translated game as a base, silly me). But I think it is a technicality just like how 6502 asm is a technicality or patching instructions are a technicality for someone playing the hack - irrelevant to their purposes.
In other words, if I want to browse hacks, I go to the hacks section. Then the hacks in the translation section would be hidden from me.
If I want to browse translations, I go to the translations section. I expect it to contain translations, and I'll check which one is the finished one/best one and use that. It may be that the best translation is a translation fix that contains the original translation as a base. Or it may be that there is an important fix hidden somewhere that functions as an addendum to the translation (doesn't necessarily matter much in which section - the best way to find it would be having it linked to from the translation page).
Well, your interpretation will of course work, but it will result in a rather ugly classification IMO.
edit2: to clarify, one of the root issues i can see here is that a hack may not work or is untested with anything else except a specified translation. in practise that hack is then unavailable in other languages than english. that doesn't mean it translates the game.. it is just incompatible/untested with the base game or some other translations.