This renaming doesn't work well if folders have existing hippo:translation nodes with an empty hippo:language property.
First, wIth such data, and the "empty language" translation first, the rename dialog opens with that "empty language" translation. The empty language translation never goes away as the renamed translation is saved to a translation with a language like 'nl' or 'en'.
Second, to the tree does not change the renamed node until it gets selected (no UI update). This is true for 7.8 and 7.9 too.
Third, on the HST side, when the translation is presented on the website for a content based menu, the HST keeps showing the "empty language" translation which makes it impossible for editors to change the menu item there.
A solution would be to have the CMS remove "empty language" translation nodes, this already exists in 7.8 and 7.9.