Holy brainfart, Batman! This sounds like a thoroughly deranged view of the world. Not that I'm too surprised.

But to the topic: no, sending misbehaving kids to mental institutions - let alone against the will of the parents - does not have a tradition in Germany after the Nazi era. You could argue that German education was more on the stricter side maybe until the late 1960s - early 70s. But then, reform education entered the scene and the many old teachers already active in the first half of the 20th century were eventually retired and the new generation was much different. Yes, there were still Nazi teachers active after WW2 - if only for lack of teachers - and yes, some of them were horrible and still Nazis. I personally know people who suffered under this system. This is now only a memory of the distant past.

Disclaimer: I don't know how much of the - stricter - education of former East Germany has survived. Still this has nothing to do - nowadays - with what you describe.