As far as i know, the hacking part (like extracting and re-inserting the texts of the game) is still done the traditional way... though AI might be used to help creating the necessary tools.
(I'm not sure how useful it might be in that area)
The main part that is done by AI is translating the text.
Actually it's nothing new... using tools such as Google Translate has been pretty common in the translation scene.
In the past, romhackers should have had to find a human translator to take care of translation, while the romhacker would focus on the hacking parts...
However, it wasn't uncommon that either the translator or romhacker would stop working on it, and the project would become dead...
What has changed now is that AI can produce a level of acceptable quality of translation... while the older tools wasn't able to do so.
Thanks to it, the bottleneck of coupling a human translator and a romhacker is lifted.
Romhackers can prepare the translation tools, and provide a bare bone translation using AI, and leave the quality work and polishing to anyone with translation skills who are able to do so.