The usual disclaimer/piece of real-world context is that <PERSON> has just made whatever words he wants up as and when he wants to1, as mentioned in TheLethalCarrot's answer.
As already mentioned in the question, the literal translation of Valar is "[the collective of, meaning 'all'] men". Morghulis is a tad harder, but it starts with "morghūljagon" being the verb "to die", or rather "entering/going [-jagon] towards the state [-ūljagon, which is inchoative] of being dead [morghe-]" (i.e. 'becoming dead'). 712
The only 3rd person plural form of this with the ending '-is' is indeed the active present tense (which, we're told, is not used for timeless actions or general truths).
And so, the most literal way of translating this is along the lines of "[the collective of] all men are [currently in the process of] entering the state of being dead". This is somewhat clunky, so if we want to translate this in a more useful way, "all men are dying" or "all men are becoming dead" are easier to work with, without loosing any of the meaning of the Valyrian. Of course, if all men are dying, then this is the same thing as saying that "all men must die", even though it doesn't literally translate to be the same, word-for-word and does indeed loose much of the subtlety of the Valyrian language.
In other words, this all boils down to the subtleties of translation, the meaning of the word 'must' meaning the it definitely will happen, so the process (in this case) has already started and that <PERSON> just isn't a linguist and <PERSON> did the best he could with what he had.
Edit: As <PERSON> said, because 'Valar' is a collective, morghūljagon takes the singular verb suffix and hence, is aortist. This essentially makes it a statement of fact that 'all men undergo death', which, as pointed out by <PERSON>, is often stated in English by using the word 'must', hence 'all must must die'
1 This is past tense, as he would now go to <PERSON> if he needs new words/phrases 674