Chris, this is not rarely needed for bigger layer 2 network and avoid useless router when layer 2 can be use instead.
VLAN translation is use by a lot of larger ISP to keep a standard configuration on client side (always the same vlan config for every customer devices) while using different vlan on backbone and backhaul.
Here a exemple of why it's really useful.
Since WISP routers (Edgerouter and Mikrotik) are horrible, where eliminating lot of router on our network and it would be a really useful feature for us.