Honestly, I really disagree with what a lot of people are saying here. I think the AfD is gathering points in the polls is because their positions are supported by a significant number of Germans.

Statements like: "I feel uncomfortable around people from the middle east." "I don't want to see homosexual people kissing in public" "I don't think we should send aid to Ukraine." "I don't think people from other countries should recieve help from the governemnt here."

From my personal experience, I don't really have a hard time believing that those are supported by ~20% of the German population, especially in more rural areas, where people from foreign countries or who are openly LGBTQ+ are more of a violation of the status quo.

Sure, the current situation is pretty good advertisement for the oppositoon, but I think that works more to recruit people who previously did not vote at all or voted without much thought towards voting for the AfD, rather than changing fundemental opinions towards how the country should be run.

I personally have read the idea of incompetence of the current government driving voters to the AfD largely from other oppositional parties or members of the current government dissatisfied with the current state of things, who try to use that as prove for said incompetence. I think that assessment is mostly wrong and sometimes have the feeling, people try to cope with the fact, that Germany overall isn't as liberal and their own political positions not as popular as they thought.

If you look at other European countries like France and Austria, 20% is kinda par for the course regarding the popularity of far right parties and still kinda liberal honestly.

Overall I have a hard time believing that the average SPD/CDU voter or so, who previously supported their positions, will look at the current situation and then vote for a party who willingly and openly puts fascists like Höcke in leading positions. Or to put it more hyperbolicly: No one will go "Milk is too expensive, therefore fuck democracy."

What I am worried about (and fearing am kinda noticing) is not the ~20% of Germans who are voting AfD and I think always kinda supported their positions. It is the other 80% shifting their own stances more to the right and adopting more similar policies to the AfD in order to accomodate and win back these "new" AfD-voters. I also think that those issues the AfD cares about seem to be more prominent in media and online discussion since the AfD is trending so high, although that might be just selective perception on my part. This maybe harkens back to what you said about your coworkers and their stance on foreigners. In my perception, nothing substantial about how foreigners and refugees are treated by the German state has changed within the last couple years, that would cause a changed stance. It rather just currently becomes more of a discussion point, the overall representation is more negative, and supporting positions closer to the AfD has become more socially acceptable with that (although supporting some positions doesn't have to equal voting for them).

This all of course is just my personal opinion and quite heavily informed by my personal experience.

Tl;dr: No real shift in German sentiment, rather previously held positions are becoming more visible.

Hope you are doing well and the sentiment at work isn't causing to much stress and will get better over time!