I think cops here can pull anyone over any time for a check of driver's license and car papers, also outside of a checkpoint. To look in your trunk or do other actions, they need suspicion though, but that's extremely easily obtained ("I smelled weed" is unfalsifiable as a subjective opinion). They also have discretion: they can see your license expired last week and send you on your merry way with a warning afaik (bad crimes is where they have to act, like conspiracy to murder as an obvious example). Of course, this is most likely with a good excuse (if you have your route navigation device already set to the office where you can renew your licence, say). It goes too far to say that we like cops here (especially people with any amount of pigment are always (among) the chosen ones in random checks afaik), but police are portrayed a positive force that's there to make things better in general and that's I guess why we trust them to be reasonable and use their best judgment to find a solution when each situation is different. Some parties (that usually also happen to be racist) would love to tear this down with more shows of force by police, and harsher and minimum punishments that judges (the third "independent" govt branch) then can't override anymore per case. This is scientifically proven to be not just ineffective but actually countereffective, but who needs science when you can have rhetoric? With them being the biggest two parties now, with the next one the polar opposite, it's looking bleak for justice in the Netherlands' near future. Forget climate, I'm not even sure how to fight for the good things we already had :( Idk to what extent you found this interesting but I thought it could be an interesting window into how things are handled and going in our tiny corner of the world :)
As for the actual question (finally replying to your first paragraph now): sorta. GDPR has exceptions for law enforcement. Pretty broad ones for actual enforcement, iirc much less so for e.g. a statistics bureau or random other government services. If the municipality wants to put up a camera in the busiest places, I think they can use the same argumentation as a private person about their need being greater than people's privacy there, and I'd imagine a judge or privacy agency are more likely to accept it because it's less likely to be abused (the people monitoring the cameras are bound by rules that the organisation makes, and not personally involved) and that changes the up-/downsides analysis. You, the govt, and businesses always need to hang a sign, also on private property (to avoid someone spies on housemates or guests), afaik a judge needs to stamp when a camera needs to be placed secretly somewhere for a defined duration and purpose