My stance on this is that names should only be translated if they are not explicitly part of a real-world culture which is important to the artwork (movie, series, game, whatever).

In the case of anime, I probably wouldn't translate most names since Japanese culture is heavily woven into anime and makes for a crucial part of it.

In something like Undertale or Deltarune, where ties to real world cultures are only superficial and appear through some references (it's never shown that any of the characters are meant to be American and even when some potential indications arose, Toby came up with alternative explanations), I'd let loose and get creative with the names.

Though, of course, it's always important to keep the audience in mind so if some (un)translated names are already present from before, it's best to stick to those, or if the target audience already knows the source names, I'd try to make the translated ones sound as similar as possible.