Yes. Link translation affects performance. The Application Proxy service scans the application for hardcoded links and replaces them with their respective, published external URLs before presenting them to the user.
For best performance, we recommend using identical internal and external URLs by configuring custom domains. If using custom domains isn't possible, you can improve link translation performance by using the My Apps Secure Sign in Extension or Microsoft Edge Browser on mobile. See Redirect hardcoded links for apps published with Microsoft Entra application proxy.