Thats half-true. Meldeverstöße are not uncommon and rarely acted upon. I was registered at my old flat for quite some time. At some point in time, you will get a nice notice that you have to change your registration. During that time, everything works quite well.
Also, registering stuff like SIM cards on an address you are not registered at is also perfectly fine as that information is stricly for the state. The only interesting value for such companies to get hold from me is the Personalausweisnummer (id card number).
This might differ for outsiders as companies want a valid statement that you have an address here.
However, the german police is very good at finding people (and things), as there is a record on where most of your relatives live... Due to all that being rather complete, it works very well. I had a case where the police called my home number because my brothers car window was wide open on a parking lot in front of his house, 600km away. The police is forced to tow the car in that case, if they cannot reach someone. Also, cars are often tracked by paint. If someone flees in a car involved in a crash, the car can often be found, as paint is very unique to cars and locations (statistically). The databases for this are big and germans are generally okay with them.
There is sometimes a way to put screws on other people where possible. Example speeding: if someone speeds in a car, the registered owner will be asked first, even if the person on the picture is someone else. If the owner is unwilling to identify the person, restrictions might be put on him, e.g. writing a trip journal where he enters each and every trip and driver. Everyone wants to avoid that.
Also, germans prefer to game the system, not to wage war on it ;). Speeding is still rampant and there is a huge number of lawyers specialized on traffic laws that know all tricks to get you out of a ticket. Suing for a 40 Euro ticket is nothing unheard of.