Words like "sensei" and "xifu" have become ubiquitous enough (through movies mostly) that it's fine to use them in a translation. "Master" or "Teacher" are also acceptable alternatives, 9 times out of 10.
But then leaving a term as "sensei" as is, all the time, is a bad idea. After all, in Japanese, you'd call a Doctor "sensei" too, and in English that would just be plain wrong. Thus, using terms that are close enough and proper, is best practice.
That said, i'm not completely anti-honorifics. Fan Translations can go ahead and use them (if they wish to alienate the (admittedly rare) layman readers), seeing as their readers are guaranteed to understand enough of the "weeb terminology" to appreciate the story. But someone just getting into Manga or Light Novels? They'll start reading, and stop immediately after seeing so many weird terms (not to mention how most fan translators don't even convert their text to a grammatical structure that makes sense to English speakers)