I will address only the third point here, which says:

(3) The option 'All languages' should be present all the time.

This is actually done following the design details of T169973: Allow to select "any language" , which states the following:

The option will be only available on selectors that can show content for any language and only when a specific language has been already selected.

In the above quote The option refers to Any language option in the ULS, which was reworded to All Languages in T175010.

@Pginer-WMF can you check this?

In T176900#3641151, @Petar.petkovic wrote:

@Pginer-WMF can you check this?

Thanks for reviewing this @Etonkovidova. About your specific points below:

1. Yes ideally w should distinguish between a language not existing and not being available to be chosen. I recall there was a ticket about it, but I have not found it. In this case, I expect the list to be so short that searching is not used much (since it only includes the languages the user has already translated with).

2. Taglizit is the word in Kabyle language for "English". The language selector allows users to search for a language name in different languages. This can be convenient if you are not sure whether Spanish will be listed as "Spanish" or "Español", however the current approach surfaces language names in languages the user may not be familiar which generates this kind of confusion. There is a ticket to adjust such behaviour: T137866: Adjust autocompletion in language selection to avoid unexpected language names

3. I don't think "all languages" is needed all the time. When selecting a language, users have already a clear idea on which language to pick. "All languages" acts as a n option to go back that is only needed to undo a previous selection.

Thank you @Pginer-WMF for explanation for taglizit. Yes, the appearance of English as only option when I typed tag (meaning Tagalog) and the auto-complete for tag as taglizit was surprising.

I am closing the ticket since no real issues are reported here, although I still think that (1) will benefit of a little bit of polishing the UI.