They are portrayed as total amateurs, unable to deal with this crisis. Granted this was 1972, but trying to storm the Israeli Olympic Village without checking if it was being broadcast on TV??? The terrorists were watching every move!
The Germans didn't have any special anti-terrorist units in 1972. They didn't need them because West Germany was 99% white and all the diversity was where they belonged - in their own shit countries, thus little crime or terrorism.
Upon realizing that the future would contain more diversity, they founded a special unit, the GSG-9, intended to tackle terrorism. These days, they mostly have to contend with the aftermath of a machete attack on german kids, or trucks ploughing through Christmas markets full of families, or a public gathering of young people being shot up for having to the audacity to enjoy life, so there's little use for them.