The Hasselhoff thing isn't a myth?! Jesus, I know he had some hits over there as a singer, but I never thought anyone took that show seriously just because he was on it.
It's sort of true, but it's also vastly exaggerated in the US.
Hasselhoff was a global star in the 80s/90s. Both Knight Rider and Baywatch were enormous (worldwide) hits and he actually had a few hit songs back in the day. As for Germany, I'd argue that he was smart enough to capitalize on his initial popularity and cater to the market, e.g. by singing some songs in German. That said, he hasn't really been explicitly popular here for decades.
As for Baywatch, Germany is the biggest foreign market for the movie. I have been bombarded with commercials for the movie and they've done a lot of marketing/co-promotion for the movie over here. Baywatch and Alien Covenant are two movies that I will never watch, if only because I've seen their damn commercials hundreds of times.