Bastille says they’re speaking Melerandian in book 1 and Nalhallan from book 2 on.
When I originally wrote Alcatraz Versus The Evil Librarians, I put that in there partially as a throwaway joke. Melerand is one of the main kingdoms in Dragonsteel, and I thought it would be amusing for them to be speaking that language somehow filtered into this world. By the end of the book I decided that Alcatraz could not be anywhere in the same continuity as Dragonsteel and that I was probably wrong for including that. Though there are other jokes in there relating to my other books—it’s much like the scene where Quentin speaks in Spook’s dialect. Those were just jokes, inside references to my other books.
Remember that Alcatraz was written as a writing experiment, not as something that I was intending to publish. As the series grew more serious to me, meaning that I developed what I actually wanted to happen—which with me usually happens as I write book two of a series, when I sit down and build an arc for the entire series—I “realified” Alcatraz’s world a little bit, if that makes sense, made it its own substantial thing. So at that point it wasn’t appropriate for them to be speaking Melerandian anymore.