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This thread is resolved. Here is a description of the problem and solution.
Problem: I am trying to build a simple custom WordPress block using the Block API, but I'm struggling to get the text strings to show up for translation properly within WPML (using translation editor).
Solution: You'll need some custom XML config for the custom block. Please have a look at this article https://wpml.org/documentation/support/language-configuration-files/#gutenberg-blocks. Basically, you need to add this XML config to let WPML know about your new block and how to handle it.