To reproduce, activate i18n, create a new vocabulary in Per language terms mode, create two branches of terms in two different languages. create a taxonomy block and you'll see that either it will not show the hierarchy or it will show it partly.
if you look at the attachments you could see the output of taxonomyblocks on the left and the correct output by another module on the right side. you can notice that the hierarchy is partly rendered in second (ru) language