Learn Portuguese (Portugal): Esse tipo trabalha no café.

Yes, it does! But in informal European Portuguese, tipo is also the most common way to say 'guy', 'dude', or 'bloke'. You will hear it constantly in everyday conversations.

Why does the sentence use Esse for 'That guy' instead of Aquele?

Both mean 'that', but they give different clues about where the guy is. You use Esse when the person is physically near the listener, or was just mentioned by them. If the guy was far away from both the speaker and the listener, you would use Aquele.

Why is it no café instead of ao café?

To say you work 'at' or 'in' a physical location, Portuguese uses the preposition em. Because café is a masculine noun, em combines with the word o (the) to become no. You would use ao (to the) for movement, like going to the café (vou ao café).

Could trabalha also mean 'is working'?

Yes! In Portuguese, the simple present tense trabalha can mean either 'works' as a general habit or 'is working' right now. However, if you want to emphasize that he is working at this exact moment, European Portuguese often uses the structure está a trabalhar.