In some scenes, the thieves speak to each other in pure German while in others they speak English, and in a few, a goon will speak to Gruber in “German” and he will reply in English.
However, within the context of the film, the constant flip between languages is a little confusing and one would assume an international criminal would prefer to speak in their native language as often as possible to confuse the American hostages and law enforcement.
The logical explanation for this is that none of the actors in the villainous roles were from Germany (for instance, Alan Rickman was English and Alexander Godunov as Karl was Russian) and the language they were speaking was actually a similar-sounding gibberish they created to mask that (hence the lack of subtitles).