I stand corrected - it seems that the authors only included the analysis of the restricted set to check if the conclusions hold in both cases.
I am still skeptical though. Both More in Common and the famous Allensbach-study of 2019 disagree. And the authors of this paper cite research for Germany in particular that is about data from before 2010. Also interesting, but not relevant: Appendix Figure 2 shows less negative evaluations of other parties - but also less positive evaluation of their own.
My best guess for why these results don't make sense to me: the main two groups of polarization in Germany are (1) the already established parties and (2) the newly established right-wing party AfD (the established parties call themselves "democratic parties" to denote the block, the AfD calls them "old parties" or "Altparteien").
So there may well be a stand-together effect that makes the established parties evaluate each other higher. That would not show up anywhere, since the AfD is not one of the top two parties either.
I can't make heads or tail of this. I'm keeping an eye out.
Please note that this study does not measure "polarization" - but instead "polarization between the top two parties"! See:> "We analyze the sensitivity of our findings to restricting attention to the top two parties in each country and focusing on periods in which this pair of parties is stable"
This does not work for any country with proportional electoral systems. I can speak to the German case, since I live there:
The two big parties are CDU/CSU (christian democrat / conservative) and SPD (social democrat). Both parties have become more similar to each other over the decades, and SPD in particular has bled voters like crazy for it. Here you can see current and historical polling data: CDU/CSU in black, SPD in red.
The most notable events here may be the "Energiewende" and the response to the mass migration in context of the Syrian civil war 2015 for the CDU/CSU, and the "Agenda 2010" and the continual "great coalition" as the junior partner with the conservatives with the SPD.
This has opened up space to the right of the conservatives (the AfD has taken this space), and to the left of the SPD (taken up in parts by the far left party PDS / DIE LINKE and the green party BÜNDNIS 90 / DIE GRÜNEN). The SPD is now arguably not in the top two anymore, the greens seem to have taken that spot, possibly for good.
So, indeed, the polarization between CDU/CSU and SPD may have gone down, but this does not generalize. Germany has also become more polarized.