I think you can just use {{DISPLAYTITLE:...}} for this? Does that not work?

It seems that:

{{DISPLAYTITLE:''<span lang="fr>L'esprit de l'escalier</span>''}}

works, after a fashion, producing:

<h1 id="firstHeading" class="firstHeading assess-start-text" lang="en"><i><span lang="fr">L'esprit de l'escalier</span></i>[...]</h1>

but:

{{DISPLAYTITLE:''{{lang|fr|L'esprit de l'escalier}}''}}

does not.

There is actually a very helpful warning on preview with {{DISPLAYTITLE:''{{lang|fr|L'esprit de l'escalier}}''}}:

Warning: Display title "<i><span lang="fr">L'esprit de l'escalier</span>[[Category:Articles containing French-language text]]</i>" was ignored since it is not equivalent to the page's actual title.

So… basically, DISPLAYTITLE doesn't handle wikitext links (or more specifically categories, but I think the problem is with links in general). I'm not really sure if DISPLAYTITLE is supposed to handle them.

@Pigsonthewing Given that this is fundamentally possible, I think we can close this task?

Given that this is fundamentally possible, I think we can close this task?

I don't know - do we think it OK to require editors to use raw HTML?

I would say when the template does not automatically add a category it works.