Ultimately, the transition from Cyrillic letters and Russian words into Latin letters making English borrowed words is fairly arbitrary. An English "t" is nothing more than a poor emulation of a Russian "т". Transliterating will always lose most of the qualities of the original. That being said, people (linguists I guess sort of) have collectively decided that Russian х is to be written in Latin alphabet as kh. H is often used in English as a modifying letter to the previous letter so it seems to make a little sense. Mikhail is the correct transliteration, Michael is the correct translation if you ask me. The main problem with all this is that no school teacher is going to be taking roll call in their classroom and think "Ah yes, Mikhael, I know that kh is the transliteration of Russian х, so I shall pronounce this with a velar fricative.". No. They will think "Ah look, a k!... What's that h doing there? Ah well, k it is then." and then proceed to say Mikael or something. Then again, it is totally and completely unnecessary that an English speaker pronounce Mikhael the way a Russian would, they're not speaking Russian and can't be expected to change their tongue mid sentence. Anyway, the magical mystical list in the sky says that "y" represents ы from Russian. If j were used then people would just read it as дж and that's apparently too obviously off for whoever decided the transliteration. However Russians want to spell their words in Latin is up to them, nothing wrong there, kh can be х all they want. But when you try to get an English speaker to read a word transliterated with an oblivious set in stone list then pronunciation becomes neither close to the original nor comfortable to pronounce. Nikolay, people'd think Niko- lay.... Or maybe they'd know it meant Nikolai. It's all just a mess. For instance, the word Soviet from совет, English speakers added a syllable because it wasn't spelled Sovyet... Ultimately for the best there I guess.
https://en.wikipedia.org/wiki/Romanization_of_Russian
Here, every system used transliterates ы as y even though English speakers consider y to be a consonant. Exposure to the Russian pronunciation also affects the dilemma. A Russian pro gamer named ХВОСТ was spoken about by English commentators who decided to pronounce it hvost (with the breathy h of English), not the read pronunciation of the supposed standard "khvost".
I think it's important for people to realize that their name gets no special place for translating things. Just as a rock has a different name in Russian, so should Steve. The translation should fit the tongue of the new language not try to resemble its original form. My name is Noah Russians call me Нова, not ноуа, and especially not Ноах because neither the English spelling nor the English pronunciation should be followed, just what Russians hear and subsequently repeat. And Russians ought to then spell what they've heard according to *their OWN language's* rules: Новой, Новы, Нову.