There are considerably more providers than actual carriers in Germany. The way frequencies are assigned in Germany probably plays into this, but in a nutshell: many if not most people don't have contracts with the actual network operators (i.e. carriers) but with companies that are merely service providers. There are a lot of spin-off companies offering discounted monthly or pre-paid plans contracts compared to the expensive 2 year plans offered by their parent companies (e.g. Congstar is a subsidiary of Telekom Deutschland).
What you say about subsidized phones is patently false. I don't recall unsubsidized phones being a thing at all in Germany when mobile phones first became popular. Even today many if not most Germans seem to prefer subsidized phones -- in my experience buying your phone separately is only common in the more tech savvy or higher end markets, although the growing popularity of discounted month-to-month mobile plans may be changing that.
AFAIK tethering and jailbreaking/rooting is, generally speaking, always legal in Germany. For subsidized phones things can be different if you're not actually purchasing the phone but only leasing it (because it isn't your property and therefore you're not allowed to modify it), but I think these days most contracts have you actually purchase the phone. Not sure whether this is due to market demand, but I think there's also a decline in carrier branded phones, so it might simply be that.
Except for pre-paid/post-paid (i.e. no fixed plan, pay-as-you-go) contracts, I think all German providers offer unlimited low-speed data with a varying amount of high-speed data. As far as I can tell, most if not all providers these days offer their fastest speeds as "high-speed" on all contracts with only the amount of data being the difference, not tiered speed caps (this definitely used to be different).
So, yeah, your information seems to be a bit out of date. At least with regard to Germany -- I don't know enough about other EU countries to say anything about them.