SN74AVC4T774: Asking for the level shifter design review suggestion

The SN74AVC4T774, like any other logic device, needs decoupling capacitors at its supply pins.

For unidirectional downtranslation, a flexible lever shifter like the SN74AVC4T774 will work, but is overkill. You can simple use a buffer with overvoltage-tolerant inputs like the SN74LVC125A (see this list).

The PCA9306 circuit is wrong; VREF1/2 are not power supply pins. You can either use the slow switch configuration (connect EN directly to 1.8 V, leave VREF1/2 open), or the normal level shifter configuration (connect VREF1 directly to 1.8 V, connect VREF2 and EN together and through a 200 kΩ resistor to 3.3 V; SCA1/SCL1 is the low-voltage side). See the datasheet.

All four I²C signals need pull-up resistors; I assume they are present, but elsewhere on the schematic.