Sakashiro
This certainly appears to be the reason for the attorney's decision. And that is exactly why it looks politically motivated. A smear campaign using Nazi symbols doesn't magically turn into art just because it targets the "right" person. Think what you will of Gauland; he was a member of Merkel's conservative party for 40 years. In fact he joined the party at a time when Merkel was still busy propagating Marxism in East Germany's FDJ. If he's indeed a Nazi and/or antisemite, one has to wonder how he managed to remain undetected in that party for four decades.
Any point about Angela Merkel herself is completely irrelevant in this context, she's not the subject of this discussion. Any attempt to shift the discussion towards her is either just you shifting goal posts or whataboutism.
I do get the feeling that for you this is more about Angela Merkel than about censorship though.
However, if the attorney was actually concerned about an outdated court precedent as he claimed, the proper thing to do would have been to pass the case on and give the court an opportunity to overturn that precedent. Rejecting the case achieved the opposite: the outdated decision remains in effect; legal certainty ("Rechtssicherheit") has not been established.
To have a trial and overturn a precedent you need to have a criminal case, but there was no criminal case in the first place because even if video games aren't classified as art according to the pre-investigation the state attorney did, the game meets the criterias for an exception under StGB §86a since it is intended to be a work of art. Even if they had actually tried to force a trial, the court would've declined because there is no criminal case to be made. Implying that this decision was made because of political reasons is baseless and it is irrelevant how you feel about it.
https://vdvc.de/blog/wp-content/uploads/2018/05/Verfahren.pdf
On site 2, the last sentence:
Alleine die gewählte Form der Satire erlaubt hier nach hiesiger Auffassung keine andere Form der Bewertung.
"Alone the chosen form as satire does not allow any other assessment in our understanding."
It's not true either that legal certainty hasn't been achieved, the OLJB and the USK amended their guidelines and rating practices following the rejection of the case. As I said, the legal framework is more than just codified law and precedence.
Sakashiro
Unlike Gauland, who fled to West Germany after his graduation from high school, Merkel arranged herself with the socialist regime. At least that is what people claim who were around her at the time.
https://www.spiegel.de/international/germany/new-book-suggests-angela-merkel-was-closer-to-communism-than-thought-a-899768.html
Irrelevant. Not the subject of the discussion.
And frankly, your idea that displaying someone with a swastika or the Nazi salute is anything other than a smear campaign is preposterous. Depicting opposition members or foreign leaders with a swastika doesn't take courage. Depicting Merkel with a hammer and sickle does. Good satire punches up, not down.
That's just your opinion and thus irrelevant.
As far as I can tell, Gauland's views haven't changed. On the contrary, they seem forever stuck in the CDU's past. If you look at the party's slogans from the 1990s and earlier about topics such as immigration, you'll find they are almost identical to AfD's. Gauland hasn't moved to the right, but his former party has moved to the left. Even the Social Democrats of the 1970s were further right than today's CDU.
The social democrats of the 1970s were MUCH further left than they are today, similiar to how the CDU back then was much further right than it is today. Something like the Agenda 2010 would've never passed through the SPD from the 70s. They would've been taken apart by their own members.