No saben apreciar lo bueno

No saben apreciar lo bueno
 

Hi,

They have no taste

Is rendered as

Ellos no saben apreciar lo bueno

If this is the proper way to talk about taste, how am I supposed to say that a person can't tell good from evil (regardless of his or her good or bad taste)?

I wouldn't necessarily confine your translation of 'lo bueno' to 'taste'. That wouldn't be my first thought.
'No tienen buen gusto' is one way to say 'They have no taste'.

Another way to translate 'lo bueno' is 'the good' or 'the good things (as in 'lo bueno de la vida')'.
No saben apreciar lo bueno de ella. = They don't appreciate/value/see the good in her.

And I would translate 'They can't tell good from evil' as 'No pueden diferenciar lo bueno de lo malo.'

The example is not my invention. So the ambiguity I suspected really exists.

I placed no blame on you for the translation. I only criticized it and improved upon it. ;)

There is no ambiguity between lo bueno and buen gusto.

The English translation given for the original sentence doesn't work in my mind.

I agree with Rusty.

If you're taking the translation from a book, the translator normally interprets the context and makes a proposal to fit the situation naturally for the native speaker.

There isn't one way to translate things, even less without a context. ;)

Thet don´t have a taste for good things I would say.