I did do a German search as well. And bias in that case would be something like "parteiisch" "bevor-/nachteilen". In 2019 a court did say it gives an advantage to incumbents because you had to limit your results to 8 parties. They've changed that since. The article you've linked is talking about its usefulness in general and not that it gives unfair advantages to anyone.
Honestly, I'm not a big fan of the thing myself and I agree that most of your proposals would improve the tool. But calling it a tool that compares political parties biased makes it sound deceptive. And I don't believe that it's deceptive. It's just ineffective.
The fact that it gives an "unfair advantage to incumbents" also isn't really a bias of the tool. It really just is the most obvious fair way to structure it. Large parties are large because a large amount of people vote for them. So they obviously have more visibility.
But I also agree that the majority rule of an ageing population in Germany is problematic. With most incumbents seemingly agreeing to not talk about the future.
Bias: A preference or an inclination, especially one that inhibits impartial judgment.
Let’s say there are parties A, B and C. A and B offer something populist solutions Sa and Sb to very important problem X, C does not promise anything on it, but offers solution for less important problem Y (single issue party). If voter thinks that Sa and Sb are the only choices, they may choose A or B, because it feels right. If voter was informed that neither Sa, nor Sb solve the problem, but some other solution Sx not supported by any party would do it, party C could become a reasonable choice - at least you get something done this way. This would be impartial judgement. Wahl-O-Mat inhibits this scenario, so yes, it is biased, it is deceptive.