Given a non-deterministic Mealy machine $M$, if $L$ is regular, is $M(L)$ regular?
There is no reason to convert the Mealy machine to a deterministic one – indeed, this is not always possible. Suppose that the input alphabet is unary but the output is binary. A deterministic machine has one output of each length, but a non-deterministic machine can have many.

Instead, the idea is to construct an NFA which keeps track of both the Mealy machine $M$ and a machine $T$ accepting $L$. Denote by $w$ the (unknown) word in $L$ on which we run $M$. At each point in time we guess the next symbol in $w$ and transition in $T$, guess a corresponding transition in $M$, and "accept" the symbol output by the $M$-transition (if any). The accepting states of the NFA are those in which $T$ is at an accepting state.

I'll let you go over the details.