This is a misunderstanding of the argument I'm making here. To break it down in more direct terms:

Premise A: For something to be democratic, the population has to wield power directly or indirectly by electing representatives. Premise B: we cannot let just any type of speech or information propagate, because certain types of information are liable to make the population do bad things and harm democracy.

The premise B immediately runs into problems with A for a number of reasons:

1. We are implicitly agreeing that there is a caste of people that knows better than the population at large, and we count ourselves within that group when arguing about the topic (the "I'm stuck in traffic" instead of "I am the traffic" conclusion)

2. The flow of information and speech must be controlled so that the population is only exposed to certain things.

If the information or speech flow the population is exposed to must be controlled lest they do the wrong things, and that this control must be exercised by some vaguely defined group of reasonable people that includes the arguer, then in this scenario the population cannot be said to actually wield power and the arguer cannot be said to actually believe in democracy but presumably in some form of technocracy.

You end up with a paradox in which people claim to want democracy while arguing that a control and screening of the population is absolutely necessary for democracy.

To be clear, I am in general agreement with you that unfettered lies pose an existential risk. But it is not in any way a democratic sentiment: it is a technocratic one since in this case you do not trust the population to wield supreme political power on its own, without guidance.

I fundamentally disagree that placing some limits on speech is necessarily destructive to democracy or implies the removal of power from the people, particularly as the people have the power to elect those that could change such a policy.

Yelling 'fire' in a crowded theatre is not protected speech, yet we don't challenge the democratic credentials of a nation that prevents that, nor is such a rule considered beyond the reach of democratic governments to change or alter, it is not an untouchable decree handed down by a group of bien pensants. Nor do we say such things about criminalisation of incitement to violence. Perhaps something in this mode of thinking is more appropriate.

And I'm also going to have to say again - this is not something I'm proposing as a solution. I am not even proposing a solution

I am identifying a failure mode in the sort of absolute free speech idealism that is common and particularly in the "marketplace of ideas" concept. I don't know how to fix it but it is clear that it is a threat to democratic principles in and of itself in the face of mass communications. And I disagree that taking steps to address it would necessarily be undemocratic, depending on what those steps are.

By your A and B premises, Germany is undemocratic, even though their rules on holocaust denial could be democratically removed were there the will to do so.

The thing is, the argument I outlined earlier wouldn't have been very compelling a decade ago. As you have shown, there are examples of speech restrictions that aren't that big a deal. Some people might indeed debate the finer merits of free speech such as genocide denial in such and such countries but in the end it rarely affects the entire fabric of society beyond a few individuals getting convicted here and there. So to answer your question, I do think Germany is still democratic despite my own argument because whatever restrictions currently exist aren't that important in the bigger picture of how the state functions.

But now with social media misinformation, we are moving from the tutorial of shouting 'fire' in a theater to the boss level whose final form we can only speculate on. That's what in my opinion ought to motivate some fundamental questions about what democracy is actually supposed to be moving forward.

Essentially, I'm totally on board with your failure mode idea: it's just that we diverge on the definition of what democracy is. If the future of society consists in heavy manipulation of information feeds for the purpose of maintaining a specific equilibrium, I believe it is better referred to as a technocracy especially if that manipulation will mostly be done by tech companies and other unelected officials. In this case, if Germany were to regularly curtail certain forms of speech with fundamental consequences on how the broad masses of voters behave (a path it is already on in my view) then it will eventually cease to be meaningfully democratic as the years go by. But I accept and understand that there are other ways of evaluating the situation.