That's a common misconception. German law actually allows the public display of swastikas in certain, so called socially adequate (that's an actual legal term), situations. Satire is one of those. If anyone can see that you are making fun of Nazis it's allowed. Another of those adequate uses is in art. The use in video games used to be prohibited for reasons that are to complicated to explain in this comment (involving an actual Nazi and a pirated copy of the game Wolfenstein 3D) but now they are counted as art as well so it's fine there as well.
I hate carnival for the 'party culture' of mindlessly drinking, sexual harassment and littering. But I love carnival for their commentary of politics and society.