WebTranslate doesn't collect any data.
User preferences (options page data) are stored only locally and are accessible only by extension itself.
This translator extension doesn't have own translation servers - all translations are performed by one of the selected translation providers (DeepL, Google, etc). So all words you enter for translations are submitted to one of those translators.
- "Access your data for all websites" - this permission is ONLY used to block / modify security headers that would prevent the translator page to be loaded inside extension. These requests are made from various domains for different providers, and they tend to change. So it's better to use this broad permission instead of long list of hosts which would require each user to re-approve with each change.