Polylang is affected by the taxonomy term splitting which will be introduced in WordPress 4.2. To be honest, the code to adapt Polylang is ready for a while as the functionality was first planned for WordPress 4.1. However, it was not active. Now that it is re-introduced in the development version of WordPress 4.2, I activated it in this second beta version of Polylang 1.7.
I also fixed several bugs. You can download Polylang 1.7 beta2, test it and report bugs or regressions on the support forum.