I think it was "hetzner shut them down" over a 36 euro dispute

What company can't pay 36 euro and legislate it after?

Are hetzner in the wrong for denying service to clients in a deficit?

They stated to have the bank statements showing everything was paid but the company refused to look at it. Sounds like they may not have been in a deficit but company refused to look at anything

Then pay it again and sort it out after. There’s a time to be right and there’s a time to be pragmatic.

I agree, but it's not clear if the situation was "hey we paid, look at our docs" and hetzner was just like "no give us money" and they were like "no we're not paying", or if hetzner just shut them down without recourse.

Personally, if I knew they were gonna shut me down if I didn't pay before X date, I'd fight it up until X-2 days, pay it, then continue fighting (depends on the amount of). But it's not clear that OP was given such a deadline.