Insulting someone is a crime in Germany. We can debate and then change this of course. I wouldn't call this a fundamental issue. It is just what we as a society decided on. (Maybe I'm too "Ze rules are ze rules" here)

Idk what exactly happend. But somehow they got approval from court to collect evidence of the crime (electronic devices) via house search. As said, the harm caused by the house search was later deemed unproportional to the crime.

Victimless when there was a clear target for the insult? Interesting, but wrong take.