Inside of Chinese Translations, the term "IQ Debuff" can refer to a few different things.
One of the main contributors to this are the characters. Chinese characters in translations will often act as if they have never interacted with another human in their life. They will have the social skills of a 4 year-old, and will only be capable of talking like our early human friends; the Neanderthals.
Here's a few examples:
A Scenario when there is a 'strong' protagonist in a fantasy genre;
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Chinese Antagonist #1: "Ahh! Monster!!"
Chinese Antagonist #2: "What!? How!? Who is this person?"
Chinese Antagonist #3: "This this this... this..."
Chinese Antagonist #4: "Y-you you.. you..."
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As you can see, they're often limited by vocabulary and do not know how to express themselves as if they were a child. Some of the worst cases like #3 and #4 do not even know how to verbally express themselves, these are some of the biggest contributors of the Chinese IQ Debuff; you can also refer to this disease as 'CID'.
It is unknown why this particular Debuff exists, or how it occurred in the first place. But, CID often runs rampant in translation works; bringing down the readability level by a very large margin.
The protagonist, or 'MC' can also be afflicted by CID unfortunately. Some MC's may exhibit strange behaviors that can even go so far as being self-destructive. Currently, there's no known reason why authors write characters that are afflicted with CID; but the main consensus is that the author's themselves have this disease.