Now it seems to me, friend, that the work [of translation] is very dangerous to me or anyone to undertake, because I fear that if someone foolish reads this book, or hears it read, that someone might wish to think that one might live now under the new law just as the old fathers lived, when in the time before the old law was established, or just as people lived under the law of Moses...

If anyone wishes to live now, after the coming of Christ, just as people lived before the law of Moses, or under the law of Moses, that one is not a Christian, nor even deserving that any Christian might eat with him...

For unlearned priests, if they understand only a little of Latin books, then it seems to them that they might quickly be great teachers, although they do not know the spiritual meaning of them, and how the old law was a sign of things to come, or how the New Testament, after the incarnation of Christ, was the fulfillment of all of the things which the Old Testament signaled toward, about Christ and about his chosen...

We also said before that the book is very profoundly spiritual in understanding and we will write no more than the naked narrative. Then it seems to the unlearned that all that meaning is locked up in the simple narrative, but it is very far from it.

It is also to be known that some were erroneous, who would cast off the old law, and some would have the old and cast off the new, just as the Jews do. But Christ himself and his apostles taught us to keep both, the old spiritually and the new truly with works.

(Translations taken from this site)

These passages come from the preface that the abbot of Eynsham, Ælfric an Anglo-Saxon monk, wrote to accompany his translation of Genesis and some other portions of the Old Testament. You'll notice immediately that his concern is with people who are under-educated (Ælfric is explicitly aiming at both a lay audience [the preface is addressed to his secular patron, an Earldoman] and not well educated priests) reading a translation of the Old Testament and suddenly thinking that it is acceptable for a Christian to do certain things such as have multiple wives or engage in incestuous marriages because they were acceptable in the time before and during Mosaic law.

Such behaviors were completely anathema as far as our friend Ælfric was concerned. Indeed Ælfric was extremely hesitant to even undertake his translation as he believed that it was too difficult to explain the complex spiritual knowledge in Scripture, that went beyond the "naked narrative", to a broader audience (one imagines that his patron was not amused with this and insisted otherwise) and that was very much in keeping with Medieval thought on translation of the Bible into the vernacular. It was never prohibited by the Church but it was slightly suspect and not undertaken lightly (as I understand it, vernacular translation of the Bible became more of an issue in the lead up to the Reformation and following the Reformation).

In this Ælfric was very current among scholars of Biblical exegesis in the Middle Ages. Indeed Ælfric was very current in most of his career as an avid supporter of the Benedictine reforms that were sweeping across England's religious landscape in the late 10th century. These reforms were aimed at improving the religious life of religious institutions in England through replacing secular clergy (that is non-monastic priests) with monks in Church positions and attempting to arrive at a more pure form of monasticism (monastic life is perpetually needing to be renewed to a purer, earlier, more ascetic form in the Middle Ages). The movement was also not an English phenomenon. Scholars trace the origin and spread of many of the reforms to the Cluny abbey in modern France.

However this non-literal approach to Scripture was hardly a new innovation of this time in the Middle Ages.

In Roman rite Catholicism (I am not sure about the Eastern Churches) there is a long tradition of, lets call it skepticism, about the literal truth or events found in the Bible. And by long standing I mean it goes back to around the same time that there was an institutional Church to really speak of. No less a figure than St. Augustine himself condemned Biblical literalism and he was writing in the 4-5th century as Christianity was just starting to establish itself as THE religion of the Roman Empire! Later Medieval theologians and scholars followed this tradition rather closely and even today the Catholic Church does not treat the Bible as literal revelation that is meant to be interpreted as written.

In the interest of staying in my own wheelhouse I will leave it at that and not go into the growth of literalist approaches to Scripture largely since I know very very little about it, but it was a much later phenomenon that postdated the Middle Ages.