Yes, there are strange rules here on the good old continent when it comes to such things. Here in germany we only recently allowed swastikas in games, as if they would magically make those seeing them plot genocide. If a game does not allow such things, someone will make a mod. Banning it in the first place is pointless. But it sure does allow some people to play flame wars on forums. Fortunately it seems to happen rarely here.
This is not entirely correct. They are allowed now, if the art of the game demands it (just like it was before with paintings, caricatures, movies), and/or if they fulfill the purpose of education. They just sort of opened the law up towards video games, so they are more considered art. The symbols are still banned and unconstitutional and a game like Battlefield would not necessarily be allowed to have them. In case of Wolfenstein it could have gone either way, really. I am not a fan of the new ruling, as categorizing games as art I find often stretched, and there is room for abuse and/or worthless additions to games.
On the topic at hand, if you can indeed kill gobbo childs, this is one of those worthless additions, and from a moral POV, regardless of what the rules or the lore says, this would be the decision of a madman and universally "evil". Plus of course picturing a race as inherently evil is obviously incorrect, as it is all subjective if you think of gobbo as a sentient race with culture, and is also sort of contrary to lore, as in SoD you can recruit a gobbo shaman, who has a somewhat gentle heart even.