Hey Kane -
Jumping in here because I told you I would. I've seen it work two different ways.
As you saw in my posts, I have the following configuration:
- Self-referencing canonicals (/es/ canonicalizes to /es/, regular canonicalizes to itself)
- HREFLANG point to each other as the alternate.
When you search "canonical delays with Googlebot" in google.es, the English ranks first and then the Spanish. Of course, with the Spanish search "etiquetta canonical retrasa con googlebot" the Spanish one ranks. This is, of course, a test with two different languages.
I've seen it work with two English-language URLs (Australia and English) where the following is what worked:
- Canonical referencing the primary (English)
- HREFLANG pointing to each other
The title/meta description of the /au/ version disappeared because of the canonical but the /au/ version ranked in google.com/au instead of the regular URL.
The self-referencing HREFLANG seems to not be necessary, but I've never had an issue using it. However, your mileage may vary.
BTW, all of this testing was done by my coworker Dave Sottimano, not me. But these were the findings.