My understanding was that it was more that words can be concatenated into new words in German which is not so much a stereotype as more a misunderstanding of fact. I.e. You wouldn't think much about something like enjoyable-comuppence but schadenfreude looks more impressive without the hyphen.

There's also the other implication that the (East) Germans were Soviet just 35 years ago.

But yes. We Americans know Germans more for their silly big words. But statements like that can be misinterpreted as the German perspective of themselves doesn't quite match the American stereotypes.

That's like saying that English (because of course) is able to describe the concept by a combination of words.