I know I’m late to the party but I just found out and didn’t find a post regarding this
TL;DR: Steam now calculates review scores based on reviews made on your languages only (if enough). This is on by default, but can be reverted to go back to review scores based on all reviews (from people that purchased the game directly on Steam only)
So they’re not actually checking the review for the language used. So they must be storing a tag with the review as to what language that reviewers steam is set to. I can see problems with this right there, a lot of people will have steam in whatever their desired language is, say German, but will post reviews in English. It seems like these reviews won’t be taken into account because they’ll be incorrectly tagged as German.
The thing you’re describing definitely happens. Just did a quick check with Steam in German and every game had a few reviews in English (just checking the preview of Most Helpful and Most Recent at the bottom of the store page). Other languages are more affected, like Swedish, where most of the reviews are in English.
I don’t really see a good solution to this. If Steam is able to correctly detect the language and only show your native one, most of the time you’ll probably end up with a handful of reviews, and then Steam has to show you something else (probably English) anyway. I think currently it’s good enough, since you still get the perspective of someone from (probably) your regional or cultural background, even if the language might not fit.