No one thinks it will suddenly change the poltical views of all their voters. The AfD will no longer sit in every TV show spouting their bullshit. They will not get millions and millions of public money. And they will not become our government. That's not a narrow success - that would be huge.

Fascists are not permitted a place in democracy as they are anti-democratic. It’s a simple principle that is part of what the German constitution is founded on. Letting them continue while the complex topics they propose simplistic fascist solutions for are addressed, is not an option.

the material conditions that give rise to the AfD

This here. Thatcherism, Schröderism, Reaganism - libertarianism, austerity narratives & politics, "lobbyism" aka pro-billionaire politics aka taking legal bribes - they all helped advance far-right populism to the mainstream.

Plus most other (not even necessarily right-wing) parties helping them along by pointing the finger in the wrong direction: immigrants.

Well, it would probably splinter them into a few new parties as their extreme wing would need to be split off to avoid the same thing repeating with the next party.

This milder form would still be popular and the backlash could catapult them to power. But they might be in power soon anyways.

Best case they will get temporarily weakened and the Germans have time to learn from the American deserter and maybe the rise of the far right won't be en vougue that much.

Deplatforming works.

It's not a silver bullet but it definitely works

Exactly. Since when has the mainstream ever succeeded in de-radicalizing a group of political outsiders?