"The good boy is smiling."
Translation:Sȳz taoba līris.
The tense system in High Valyrian works differently than the English one. High Valyrian doesn't have any progressive forms, so "he is smiling" and "he smiles" are identical sentences, without a construction using a form of "to be".
"Issa" is "he/she/it" is, yes. But in this case, "to be" is used as an auxiliary verb in English. "Sagon", the High Valyrian for "to be", is not used as an auxiliary verb. It's only used as a copula.
"Issa" or he/she/it is, is more of a state of being. They are good, they are happy. It's the verb attached to an adjective.
For active verbs, the "is" is implied on the conjugation of the verb. Lirisi = he/she/it is smiling. The "is" is attached to a verb, not an adjective, and is therefore implied.