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Its definitly possible that the translation software was installed with byte, but never explained how it automatically translated the language. We don't know what happened exactly or when the protagonist was put into preservation due to the memory loss, but it could definitly be a hint that either byte is hiding something from us OR beastmen had appeared around the same time that the cascade happened, which could be useful to know, instead of them appearing randomly years later.

(I'm also ruling out that the translation system was learning the language as they talked since loken talked very little and yet we understood him as soon as he started talking)

It could also be possible that the demons are a alien species, or at least crafted with alien materials. Since the mere THOUGHT or sight of them could drive people insane, much less what they could do to you if they catch you.

Also don't forget that demons ONLY target sapient species like the beastmen and humans, not wild animals. Could that mean the demons were specifically engineered to target humans and bipedal species? Or are they just smart enough to target any species that could pose a threat to them?

(another less likely theory is that the demons are just thinking of this as a game, like playing with their food, and don't leave the blackzones for the sole reason of giving their pray a fighting chance for survival, since they have emotions or at least intelligence, and can kill beings very easily.)