I will start by assuming the following:
Everyone understands the offside rule.
Everyone saw the first Costa Rica goal in today's Costa Rica - Germany match
One basic rule of economics is that people, all things being equal, will rationally choose the course of action that gives the greatest reward.
Knowing that, why do teams, even teams in the highest levels of competition, insist on such plays as Germany attempted?
The idea, obviously, is that the defenders play in a line, and move forward a fraction of a second before the attacking forward starts the pass, thus leaving the receiver of the pass in offside. You do that, you get the ball. Simple.
The bad news are, of course, that such plays work about 50% of the time. If that.
It requires the defenders to move forward in the exact same fraction of a second. If one stays late: it doesn't work.
It requires them to synchronize that way by an audible call, because it's very hard for them to see their whole line: they are stading sideways almost every time.
If the passer is smart, he will simply avoid the pass and run a diagonal.
It the receiver is smart, he will fall back, avoiding offside, and rely on a teammate to sprint for the pass.
And all these problems can happen every time the play is attempted.
The risk is huge. In fact, nowadays, in order to lure the attacking team into this trap, you need to play it with all your 4 defenders! Each extra defender probably doubles the chance of error.
And what do you avoid? ...a low probability long pass. Remember, in football, every attack is low probability. A penalty is only about 80%!
So, the german coach is incompetent. He may do some things well, but Germany's defense is atrocious. They will not win the cup.