Panels does not display correct block titles

If one overrides a block on the block configuration page by entering a new value in the "BLOCK TITLE" textbox, Panels ignores this value and uses the original block title instead. So if I wish to override the block title for a block added by a module (e.g., menu block) on the page admin/structure/block/manage/menu_block/13/configure by putting "New Title" under BLOCK TITLE, I will still see Old Title on the panel page.

I am aware that I could use the "Override title" setting for the pane to set the title to "New Title"; however, this field is not translatable, and I have a multilingual site. Unchecking this setting or using %title both display Old Title.