I doubt any selector would mark you down because you don't speak the local language on the evaluation sheet. At the same time, I would also assume that it's in the back of the mind of evaluators: After all, succeeding in a place isn't just tied to the language in which classes are taught. Knowing the local language has many other benefits:
- You can participate in the coffee conversations of your peer students.
- You will have an easier time having a large and supportive social environment.
- You will likely be happier. It's hard living in a place where you don't speak the local language: Many otherwise mundane things (registering your residence, getting a driver's license, dealing with visa issues) are all difficult if you don't speak the language; they will eat your time, and they will in the long run also eat at your happiness. You will feel lonely and isolated.
Evaluators know all of this, and it will be on their minds when comparing applications even if there is no specific field on the evaluation sheet.
I'll add one other thing: Universities in Europe are largely funded by taxpayers. It is clear to everyone who works there that that comes with the obligation to educate the next generation of people living in the respective country. They do not necessarily have to come from that country, but it's a loss to the country to educate people who end up not staying in the long run, and someone who doesn't speak the local language isn't likely going to stay.