while you are not supposed to be carrying an ID, the police is entitled to request that you attend within a week (if memory serves me right) your local police station and identify yourself. Not doing so is a criminal offence. So much for not having "Papieren, bitte". Itn reality, it is just "Papers by end of the week prole".
While true, the above is not complete. The Police need a reasonable level of suspicion to demand such. They can't just stop you and ask for ID for wearing a loud shirt, or having a beard.