The bug has been found. The fix is now in the release pipeline and should find its way into one of the next server releases.
Until then, possible workarounds are:
- downgrade to plex server 1.16 , set the language prefs again, then upgrade again.
- edit the plex database directly as shown in here: How-to Guide: Setting default language for audio track & subtitles on managed accounts (e.g. Guest)