Word Lens was the first iPhone app that I saw that really felt like Magic, glad to see it was bought up and put infront of a mass audience (where I assume it will gather data and learn)
Yes, if you look in the settings the following option appears:
☑ Improve camera input (Allow Google to retain your images related to translation)
It is set on by default.
When Augmented Reality works correctly, that's how it should feel.