The idea that Jews in what was the Holy Roman Empire developed some unique customs, languages, and tradition during the millennia they lived there is fairly uncontroversial self-evident. Jews did the same in the Arab world, Spain, Ethiopia, and the Caucuses. Or Bukhara for that matter.
What is absurd is trying to parse the existence of this community out as some sort “European Jews” with a marginal connection to the 3000 year old continuity of Jewish existence, as if there are some other Jews with a better claim to that heritage. Despite the obvious cultural interchange that happens everywhere, the defining aspect of being Jewish in the diaspora is that of being different, some of that self-maintained and much of it imposed. They didn’t just emerge from the ground in the Holy Roman Empire—they just moved there from where they were before.
Boiling this down to “white Europeans vs. brown locals” is no less simplistic and wrong than “Jacob vs. Ishmael is still going on.”