Yes and no. It is certainly allowed to portray racist and murderous, even genocidal characters, otherwise there wouldn’t be any film about Hitler or WW2 in Germany and we have plenty of those (or other historical movies). And I personally would love to see a (or another) story about a german soldier, struggling with his orders (for example to hunt down jews, kill innocent citizens in poland, bring down dissidents) and his own consciousness.
What you can’t do however is to create a story where these things are told in a way that they are justified, a good thing to do, didn’t happen or it wasn’t as worse as we are told. And that will most definitely get the police to knock on your door (if you’re living in Germany obviously), as that is considered “incitement of the people”. We call it Volksverhetzung, and people go to jail for that.
However, the former isn’t brave nor controversial, it has been done a hundred times already. Which doesn’t mean it shouldn’t be done again, especially in a well made game. I would likely buy it.