Though it is true that the structure of se habla using se before the third person singular of the verb is seen in reflexive constructions, this is not the case in the example that is being discussed here. You wouldn't say El se habla castellano. You would say El habla castellano. He speaks Spanish. The pronoun or particle se has many uses, one of which is with reflexive verbs. In the case where we see se habla castellano This is not considered a reflexive structure but rather the passive voice. The best translation in English is Spanish is Spoken here. This use of se before the third person singular of the verb is very common in Spanish as is the passive voice in English.
Some different uses of this structure are:
Se levanta a las ocho. = He gets up at eight. (reflexive verb levantarse)
Se ayudan. = They help each other. (to express an action done to -each other-)
Se entrega el correo cada dia. = The mail is delivered daily. (passive voice)
No se habla en el cine. = One doesn't speak in the theater. (impersonal se)
Se lo comio todo! = He ate it all up! ("se" used for emphasis)
Como se dice? = How do you say? or How does one say? (passive voice or impersonal se)