How did Steve Rogers understand Groot in Infinity War?

Because he's awesome, that's why!

No, really, that's all the writers had.

First let me get this out of the way... ROFL!!! (Sorry, merely thinking about this part makes me chuckle.)

Here’s the truth, Steve didn’t necessarily understand Groot. Groot speaks, uh, Groot. While Rocket’s buddy seems to repeat the same thing over and over, in reality he’s speaking his own language. And like every single person/space creature that doesn’t speak Groot, all Cap heard was “I Am Groot”. Needles to say, Groot in this scene is very likely saying something else but Steve doesn’t know that and therefore good ol’ Cap ends up looking clueless.

On second thought, what if Groot did introduce himself this one time? Could be the joke isn’t that Steve misinterpreted Groot but we, the audience, did. So maybe the joke’s on us! :)) But if that was the real intention, hearing Cap’s response of “I am Steve Rogers” is still hilarious given the history of Groot’s catchphrase. Anyways, I prefer the joke as it was perceived by most, which is Cap was made to look out of touch. It just works so well. Classic moment!

He didn't understand him. As it is with every other character who doesn't understand his language, all they hear is "I am Groot".

Since Peter Quill does not seem to be a master of languages, it's just a gimme that the Earth Language used in the country the movie is being played in is also being used in space.

I mean, it's not like Charlton Heston stopped and asked why all those apes were speaking English if he was supposed to be on a different planet......

He says "Iyamgroot". People who speak English hear "I am Groot" and that's why they call him Groot. He's not actually saying "I am Groot" he's just making a noise and the way he expresses that noise defines what he's actually saying

I thought it was Thor who could understand Groot????

Oh come on....really?
Groot says, "I am Groot"
Captain America, "I am Steve Rogers"
You: How did he know??

Lol really?