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This issue is fixed in QuarkXPress 7.5 and 8, The ability to convert an entire layout to a different text language has been restored in QuarkXPress 7.5 and 8, albeit with some modifications. You can now convert the text language of an entire project file by going to Utilities > Convert Project Language. After selecting the text language to which you want to convert the project, save or export it normally.
In QuarkXPress 7, we made a change to allow single language configurations of QuarkXPress, such as US and International English, to open multiple-language QuarkXPress Passport projects. Because of this, we removed the option to save a project as a single language. We have now learned that users were using this option to convert a project from one language to another. For example, if you started with a US English layout, imported Spanish text, then saved as a single language project and chose Spanish, all the Paragraph and Character Style Sheets were preserved, but the language of those styles would be Spanish. This matched the language of the imported text.