This is misleading. I moved to Germany last year and there's a whole secondary market - much bigger than I've seen in any other country, in sublets. While you officially need anmeldung (city registration) to live anywhere in Germany, there are at least as many sublet apartments without anmeldung available as official rental apartments on the open market. They're usually a good deal cheaper too. Lots of people (immigrants especially) have their 'official' anmeldung with a friend or relative, and move between short term sublets (1 - 6 months, but usually 3 or less) for years at a time. There doesn't seem to be any regulation of this sublet market at all - except by the management of individual apartments (where the subletter is in violation of their own rental agreement).

I don't think it is misleading, it is simply a different class of problem. And as you said yourself, in most cases these subleases are not actually legal.