During my first test of the new feature I thought it was broken, but it turns out the setting is not visible if the site language is set to the default en_US. Change the site language under Settings to something else and WordPress will then show available translations in the user profile language dropdown.

The reason for this somewhat unexpected behaviour is because the list of available languages on the user profile screen is limited to the currently installed languages, unlike the language selection options on the General Settings screen which allows you to install any language available on translate.wordpress.org. If you install a language other than English (US) then it'll be available for users to select on the user profile screen.

This may be something that can be improved in 4.8, but I thought I'd let you know the reason behind it.