When pointing the id property on the Command item object in the Command Set manifest to a localized string, the Command Set should use the localized string as button text. It should use the correct resource if a resource is available for that locale.
The Command Set does not use the localized string of the correct resource, it uses the default localization resource instead. (en-US)
"id": "$CommandSetTestCommandSetStrings:CommandSetTestCommandSetStrings.Command1;"
Check the temp/manifests.json file. It should contain the localization keys and values:

Debug the extension on a SharePoint site in the targeted language. It will show the default en-US text:

In the file named listview-host-assembly-[locale]_[hash].js the Commands list is loaded from the spfx extension manifest. Unfortunately, while the manifest file contains the right keys and values, the default property is used to instantiate the Commands array:

The fix is included in the next patch release. Thanks for reporting it.
At Ignite 2017, I thought I saw an example of grouped commands, but I haven't been able to find any information on it and would have to spend hours going combing through the videos of the sessions I attended. It would appear from the code snippet provided by @martinlingstuyl that this would not be supported. Sure would be nice if it was. Anyone else know?
What do you kwam my grouped commands? Like submenu鈥檚?
You could file it under a new issue though, that鈥檚 probably better. If you do mean submenu鈥檚: that鈥檚 certainly not something I came across, though that doesn鈥檛 mean it isn鈥檛 possible. Nice feature it would be though!
I鈥檒l close this issue down now.
@martinlingstuyl Does this work for you now?
I'm experiencing the exact same issue that you have described here. Can anyone confirm that this patch has been installed in the meantime?
Cannot confirm that it works, no. But I didn't have time to check thoroughly.
In case anyone else stumbles upon this thread - I found another solution for this issue.
It is less efficient but very easy to use. You could set the title in the onListViewUpdated eventhandler:
@override
public onListViewUpdated(event: IListViewCommandSetListViewUpdatedParameters): void {
const command1: Command = this.tryGetCommand('COMMAND_1');
command1.title = strings.Command1Title;
}
Like any other access to the strings class it will at runtime set the title with the matching language from the string resource.
I am still having this issue with german translations (SPFX 1.8). The manifest will ignore the translations and just show the default value.
@cwdata answer will work, but that is just a work around.
I am still having this issue with german translations (SPFX 1.8). The manifest will ignore the translations and just show the default value.
@cwdata answer will work, but that is just a work around.
The same thing on SP FX 1.10, according to manual for web part should be used gulp serve --locale=de-DE, but despite I have both localized values in manifest and /loc/.js files, without overwriting like was described by @cwdata, they're ignored from both places, with overwriting used values from /loc/.js files, so values in manifest have no sense.
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Most helpful comment
The fix is included in the next patch release. Thanks for reporting it.