This page offers a demo of the language text widget. In it, there are pieces of the text which are not in Anglais, but in another language like Französisch. It demonstrates how one can interact with them.
If you hover over the language code, you will see the label in the other available languages. It will also tell you to click on it in order to change the label for the language you are reading this in, i.e. in English. When you do that, the widget gets replaced and the whole functionality will disappear.
There are a ton of things that do not work yet appropriately, like the pressing Escape during editing, or when you cancel the editing that the widget is not responsive anymore, and the pixel-accurate styling of the widget, but it should be possible to understand this as a prototype. In Wikidata most of the untranslated labels will appear in tables anyway, so the pixelaccuracy in flowing text is not so relevant.