The obvious thing would be to create a ve.ui.MWReferenceContextItem.prototype.getPreviewElement method in Cite, or maybe a ve.ui.MWReferenceContextItem.static.previewUseView property, and let ContentTranslation override it so that it works correctly. I think we'd be happy to do that.

But the situation prompts the question, why doesn't rendering the preview from model (the thing that happens in MWPreviewElement when useView=false) work in ContentTranslation? Possibly that's the real bug and it would be good to fix it. But I think this would require someone to figure out how both MWPreviewElement and ContentTranslation works in detail, and possibly no one wants to spend too much time on that. (Unless @Esanders knows the answer off the top of his head, haven't got a chance to ask yet.)

But the situation prompts the question, why doesn't rendering the preview from model (the thing that happens in MWPreviewElement when useView=false) work in ContentTranslation?

May be somehow related to the difference in reference previews work in VE and CX? in VE, they appear as popups near references. In CX, they goes to a special area in UI(tools column CX UI)? Just a guess.