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It seems like the difference is between a cultural understanding and a legal one. The legal bar to be considered German is citizenship, which is what is being discussed in the context of a political party's official policy.

It would be an extreme view to say a person who immigrated to Germany and recently attained citizenship has more German ancestry than someone who was born in Germany to parents who were born in Germany but I don't think anyone is saying that. The point is just that "unequal German" doesn't make sense because German is referring to citizenship; it's either "German" or "not German", never "German, but lesser".