If you go to http://wikidata-test-repo.wikimedia.de/wiki/Data:Q2?uselang=sr you can see the label "Хелијум". If you go to http://wikidata-test-repo.wikimedia.de/wiki/Data:Q2?uselang=sr-el I expect you should see the label transliterated to Latin alphabet as "Helijum" but there is no label at all. MediaWiki interface is transliterated correctly.
Interestingly, if you try to enter the label, you get "Database query error" instead of "Unrecognized value for parameter 'language': sr-el" that might be expected.
In my opinion, the correct way of handling this is that it should be possible to enter the labels in language variants, and that these labels should be displayed if they exist; if they do not exist, they should be made by the automatic conversion to the variant from the "main" label.
Version: unspecified
Severity: enhancement