That's from Jisho.org, right? Anyway, my old physical JP-JP dictionary, as well as online Japanese encyclopedias and dictionary websites still properly differentiate between the two:
Not to mention that ALL the official Japanese material for the game clearly indicate "harlem" instead of "harem", as you can see
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,
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or
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if you wanna see the original game being played. So either the intention was to really say "Harlem" or the Japanese devs made a mistake, which is very plausible. I haven't played the game to know if "harlem" makes sense in the story's context.
Still, the point remains that this is not the translator's fault. As bad as the translation may be, the name was the developers' idea.
But just to give it credit, it seems like ハーレム became a derivation of ハレム as indicated by the highlight (I didn't include the arrow). And ハーレム seems to be a more popular translation of "harem" nowadays, at least informally, since even the manga and anime using the word as part of their titles use ハーレム.
Wouldn't adding ー just cause the a in "ha" to be pronounced as a long vowel.
At least I don't see how that could add an L into the name but on the other hand I'm not Japanese.
Yes, that is used to extend the vowel, changing the word. Adapting foreign words into kana can be messy. They usually try to emulate the sound rather than make it consistent with the writing. The same effect can be observed in the word "ハート", meaning "heart". It just sounds closer to the original language's pronunciation compared to prioritizing the syllabic equivalency.
Then again, it is so confusing that it would be perfectly normal that the Japanese devs translated the name of their own game incorrectly, so it is definitely possible that they wanted to say "harem" with "harlem".