There is nothing in the contract of carriage or in the law that impose on anybody to take any flight. In addition the prevailing law in Germany allows out of sequence use of tickets. The fiction that a flight from A to B, change the airplane and the flight from B to C is one flight is just a fiction and most courts will see them for what they are: two flights.
In fact the whole charade is organized and orchestrated by airlines. It is not negotiated to any degree.
The Lufthansa claim of fraud is as bogus as it gets, regardless of any merit of the largest European German airline lawyers filling in a wrong court in their home country - where are the damages? The airline most certainly cannot show that the airplane burned more fuel because it was lighter? Or can they prove that they did not seat anybody else in the empty seat?
How about price gauging by the airline pricing two flights cheaper than just one of the two flight? Where is the discussion or ethics or law on that?
Anyway - last year I bought 9 Lufthansa tix. Lufthansa defrauded me on 7 of them and refused to correct. When legally challenged - Lufthansa provided copies of documentation from different year, with different pax names and different routing.
On the other hand out of many instances of flight cancellation/irregularity LH was the only airline painless in honoring the EU-261 obligations

What has this to do with this thread. Even if what you have written is 100% correct (which is is not), that has nothing to do with OP's question, which is a practical one.

Just as German consumers learned when that country required that tickets be sold which may be flown out of order, such tickets were put up for sale in very short order. But, they are vastly more expensive than "ordinary" tickets. Thus, if asked the consequences of Germany's decision, one would practically say, "little or none."

That's not convincing.

There must have been thousands of hidden-city tickets without price recalculation by FTers alone. It's totally absurd to assign any significance to a single lawsuit which hasn't even been won considering the thousands of cases in which last legs have successfully been skipped without any penalty.

You mean a single complaint on FT.

My guess is that most people who get caught out don't come whine on public boards about getting caught.

That's not the issue. If something were to go wrong with the airline's A-B flight, they are likely to rebook you on a different routing, either direct A-C on another airline, or on a different routing such as A-X-C, given that you are presenting as a passenger who needs to get from A to C.

That said, the chances of this happening are slim to remote, and no European airline is going to come after you for departing the A-B-C flight at B.