They're simulating Germany over the Top End?

It's a German talking about Australia, comparing the surface area with something a German audience would be familiar with.

It's hard to imagine Australia filled with two dozen Germany-sized nations instead of one borderless island/continent.

I don't understand, what am I looking at?

For you it's an IQ test.

For everyone else it's showing the size of a RAAF training area in comparison to Germany.