Almost correct, but artistic depictions of Nazi iconography actually are exempt from the ban (falling under "Kunstfreiheit" - artistic freedom).

The reason why Wolfenstein still had to be censored was because video games were not really seen as a form of art for quite a long time. But AFAIK that has fortunately changed in the last years and you can now legally obtain uncensored Wolfenstein versions in Germany.

Wonder if that's harmful in the long run, cause you're not allowed to make the bad guys look like what they were, bad guys.

That statement is not true and it never was.

It's worth it for the story alone (both main games since the reboot). Such a wild collection of outrageous twists and turns, but with characters that you actually care about. They managed to write a main protagonist who - in between eviscerating Nazi mechas and blowing up secret bases while using improbable tech - is actually an emotionally vulnerable human being. This is such a stroke of genius that suddenly makes the entire scenario so much more believable and the story so much more impactful, because he and many of the other characters feel like real human beings, despite the almost exuberant embracing of clichés (only to then tear them up). It's still campy as all hell, but it somehow works. I don't think I've ever seen games juggle so many different balls without dropping any of them. Even if you don't care about any of that, the shooting alone is second only to the recent DOOM reboots.

I randomly played the first cause it was on psplus and I got hooked. I really liked this new series and want more