But it has "Mongolian" as an option on its drop-down menu. It does not specify "Mongolian - Cyrillic."
E.g. the first line of a poem from linguamongolia.com, "saiqan časutu čağan ağulan-dur" (see http://www.linguamongolia.com/reso1.html , White Mountains document for original script) would be written "сайхан цаст цагаан уулд" (saihan cast cağan uuld) in Khalkha Mongolian orthography, if I'm not mistaken.
But then, sometimes Google Translate is happily combining two languages. E.g. it can translate from Crimean Tatar, but it will detect it as Tatar, even though it's a different language...
It's simply mislabeled (or not clearly labeled, whatever you call it).