To end discussion once and for all Dove doesn’t speak Italian because she is an American who works primarily in America and when she does come to Italy sporadically it’s for Damiano and they mostly speak in English. I also think they mostly stay in America when Damiano isn’t working.
Luna speaks Italian at this point because she actually loves in Italy for 3 years now. She stopped working as soon as she got with Victoria. Also Victoria has an all female friend group that Luna has been embraced by which also helps with picking up the language quicker. Whereas Damiano mostly has guy friends so of Dove isn’t hanging around a bunch of guys that often either.
It’s not that deep Dove and Damiano Fan relax who cares that Dove isn’t fluent.
This and when he said she understands, obviously he meant she can understand him whenever he is speaking italian. It's easier to undertand someone you are living with, she knows his voice and everything, while it might be a bit harder for her still to undertand other italians when she is not used to it.