With this, naming schemas get cluttered real fast. In any large-ish application, you might have 50+ classes. Can you imagine trying to pass around data types like SortedDictionary<LanguageWord>? In my experience, long class names are hard to read, and harder to code down the line. Class names should (in my opinion) be as short as possible to accurately represent the entity that it is modeling.
This method leaves no room for organizationclass organization, which is extremely important, especially in languages like C#, Java, etc.
var word = new Language.Word(); // out of namespace and even simpler
var word = new Word(); // inside namespace
This allows you to separate what entities are in what relationship, and to set them apart. These entities are grouped logically because they have to deal with language(s). This makes sense when the complexity increases. Maybe I would have a namespace for things that relate to French, and I would add French as a nested namespace under Language; e.g. Language.French.
I'll also mention that, as you see in the above example I don't need to use the prefix Language. while inside that namespace. So in ExtendedDictionary, I don't need to use Language.Word as the type in in the dictionary variable, because both entities are in the same namespace. This reduces a lot of name clutter. With the class prefix method, you can't avoid the clutter. With namespaces, it's part of the feature of the language and makes things inherently more readable.