The law in question was established in 2016 and it calls for a special type of bank account ("Basiskonto") to be made available to all[0]. So the story could predate the law or (which is quite likely) the account might be a regular account, not the fallback.

[0] Conditions apply: A bank isn't forced to do business with somebody who defrauded them in the last 3 years, for example. But the decision must be made timely (10 days), it must be explained and there's a well-defined path to legal review. Details at https://www.bafin.de/DE/Verbraucher/Bank/Produkte/Basiskonto...