Fan translations have used Babel Fish or similar during the development process for decades. If the final script isn't AI translated I don't see any issue with that.
Screenshots of the translated game do give an impression of edited - or even, at times, unedited - machine translation. What with overly direct word-by-word translations, as well as reasonably obvious references (which the game is chock full of) getting mistranslated as something else entirely. Although those screenshots, of course, are not necessarily representative of the whole script, which was a collaborative effort by many translators.
Given the particular nature of this game, so reliant on inside jokes requiring a knowledge of SEGA history, it's likely an AI translation could miss a lot, and I think the community will eagerly await further real translations done by professional translators leveraging these tools.