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The Store policy document you mentioned first means that you need to localize your product for the language that you declare to support in your app. This is required for your product.
The publish document you post secondly is a guide for creating Store listing. This requires you to create localized Store listings for each language that declare to support in your app. This will affect the store page.
The Xbox document you shared is a requirement. I think you need to make sure all marketing copy strings are localized if your app supports EFIGS (English, French, Italian, German, Spanish) & Japanese and you want to publish your games to these markets. Since Xbox is not supported here, I can only talk in the side of releasing common applications. You need to contact the Xbox support to confirm this requirement.
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