I think the German court is pretty much right, the same would happen in Norway if someone brought it up.
It's not the Autopilot term itself that is the problem, it's the context of the ads as a whole. When your ads mention "Autopilot" and "hardware capable of fully autonomous drive", it does set high expectations. You could argue the autopilot term is correct used, and the hardware can do full self-driving, however the software not mentioned in the ad can not. But it is not fully clear for an average end-user what the car actually can do.
Elon Musk however just did a classic strawman response on Twitter by dismissing the entire case, by countering just a small part of the case AS the full case. He addresses only the use of the Autopilot term (but fails to address the actual concerns made by the court, self-driving claims etc...):
Twitter
Then further he attempts to reduce the credibility of the court by shifting the focus to that a German automaker is behind this:
Twitter