Last modified: 2014-04-22 09:15:46 UTC
This is with Translate 2014-02-04. I've created a testcase which you can see by visiting https://www.mediawiki.org/w/index.php?title=User:SamB/tvar_bug&action=edit§ion=1 and clicking the "preview" button. Notice how all of the Translate markup shows up in the Preview because the <translate> tag isn't in this section? That's kind of annoying.
I don't really see a bug here - unclosed tags are probably just displayed like that by the parser, plus this just applies to the preview. Not sure if that's something to fix in the Translate codebase.